‘Only two million Nigerians have insurance policies’
Of Nigeria’s estimated two hundred million populations, and of ninety million adults, only two million people have one form of insurance cover or the other. This accounts for why insurance penetration ratio is still less than 0.5 percent and contribution to GDP still less than 1 percent in Africa’s most populous nation, expert has said.
Sunday Thomas, deputy commissioner for Insurance, National Insurance Commission in a presentation titled ‘Insurance Consumption: The Apathy and the Unknown Secret’ said apathy to insurance is a major challenge to selling insurance in this part of the world.
Thomas said the inability of the society to put off momentarily, what is needed now for what is needed tomorrow has been one of the causes of apathy for insurance. “Insurance consumption is about tomorrow, while most of what attract people’s spending are the products for today’s consumption.”
He said the invisibility and intangibility of insurance products is also another challenge as people are attracted more by what they see and feel, losing sight of the value creation.
“Unfortunately, insurance products suffers these, being services which are based on promise. The promise may come to fulfillment immediately, long term or it may never happen. Unfortunately again, the intrinsic value of that product are not properly presented and thus not appreciated by the consumers”.
Thomas also said that insurance is not also the kind of product that you can easily compare with another similar product. When you cannot compare between two things, your decision is most likely to be slow. You have the feeling that you are just “stuck in it;” and that could bring some resentment.
“People tend dissociate themselves from negative thinking and/or reasoning. People don’t like thinking or talking about the possibility of death or accident occurring, yet this is an important consideration for every reasonable person”.
According to him, the underperformances of suppliers of insurance products are in many arrears, and these include claim payment, after sale service, selling of appropriate products, etc.”
“The consumer embedded problems including poverty, illiterate, uninformed about insurance principles as distinct from gambling; have also contributed to the apathy.”
Modestus Anaesoronye