Experts at Insurance September outline strategies to boost sector penetration

Cynthia Ezekwe 

Experts in the insurance industry have urged practitioners and regulators to rethink their communication strategies, as low insurance penetration rates continue to be a problem in the Nigerian insurance market.

With traditional marketing tactics falling short, they contend that the industry must find new and creative ways to connect with consumers and help them understand the importance of insurance.

Insurance experts have suggested that by using simple, easy-to-understand language, insurers can make their products more attractive and help consumers feel more at ease about buying them. They said that improved communication could have a positive impact on economic development, as individuals and businesses are better protected from financial risk.

Reports have shown that many people do not buy insurance policies due to a lack of understanding of how they work. This lack of understanding leaves them vulnerable to financial hardship if something goes wrong. It is in light of this situation that insurance industry experts have urged practitioners and regulators to develop effective communication strategies.

Olawanle Moronkeji, associate partner at Phillips Consulting Limited, a business and management consulting firm, spoke at the 7th edition of the Insurance September event on the topic “The impact of insurance on our lives and livelihoods.” During his presentation, he noted that communication is one of the biggest challenges facing the industry, stressing that information without an effective communication channel is ineffective.

Moronkeji argued that there is no clear advocacy or regulatory framework in place to encourage people to get insured, and that regulators need to step up their game and take action. He highlighted the need to educate people in rural areas about the benefits of insurance and to help them understand how it can protect their livelihoods.

He gave the example of rural farmers and their perishable crops, noting that there is a need to raise awareness about how insurance can help them manage the risk of crop failure.

Umashime Oguzor-Doghro, head of retail at Leadway Assurance Company Limited, commented on the wide-reaching impact of insurance, noting that it provides a safety net for people in the event of unforeseen circumstances. She pointed out that insurance can help people manage their risks and protect their livelihoods.

She further noted that the insurance industry has been making efforts to educate people about the benefits of insurance and to make it more accessible, but that there is still more work to be done.

Oguzor-Doghro noted that the low level of education and adoption of insurance in Nigeria is a major challenge, and called on the insurance industry to use the right communication channels to educate policyholders and the general public. She argued that this would help to reduce doubt and uncertainty, and that it would also improve the process of making and settling claims.

She also highlighted the importance of testimonials from customers who have had a positive experience with claims settlement, as this could build trust and confidence in the insurance industry.

According to Oguzor-Doghro, there is still a lot of work to be done to reach out to the public at large, but she believes that the unreached can be reached over time if the right initiatives and strategies are put in place to provide a positive customer experience.

She identified digitalisation as one of the key factors that can help to improve the customer experience and increase the penetration of insurance in Nigeria. She also mentioned the need for more collaboration between the public and private sectors, and highlighted the importance of creating an enabling environment for the insurance industry to thrive.

Edobong Akpabio, an agribusiness entrepreneur, said people need to feel the impact of insurance, noting that the industry can use Corporate Social Responsibility (CSR) to raise awareness and address the mismatch between the expectations and reality of insurance in Nigeria.

She also pointed out  that the use of local languages and graphics can help to make insurance more relatable to rural dwellers, and to create an emotional connection with them.

Ekerete Gam-Ikom, a management consultant in insurance and entrepreneurship, emphasised the importance of using the right channels of communication to educate the public about the benefits of microinsurance and other types of insurance. He stressed the importance of seeking help in areas where the insurance industry’s capacity is limited, such as in the area of risk management.

Gam-Ikom also highlighted the need for the insurance industry to collaborate with the agricultural sector, and to create tailored products and services to meet the specific needs of farmers.

“We have to adopt the right channels of communication to create awareness, and pass  the messages across effectively, so that the public will be able to understand what we are doing, and what they stand to benefit as policy holders,” he said.

Gam-Ikom stressed on the need for a deliberate and sustained effort to communicate the value of insurance to rural populations in Nigeria, stating that they can only benefit from it if they have a clear understanding of what it entails. He emphasised that insurance penetration in Nigeria will increase when the right communication channels are utilized to reach the public.

He also noted that the insurance industry must engage in intensive marketing and training campaigns, and that these campaigns should be delivered in the native languages of the target audience, in order to ensure that the message is understood

According to Edwin Igbiti, president of the Chartered Insurance Institute of Nigeria (CIIN), it is essential to establish robust communication channels in order to promote the growth of the insurance sector.

Igbiti added that the insurance industry must engage the government and bring them to the table to discuss the importance of insurance. He stated that if the government does not recognise the importance of insurance, the public will not perceive it as important either.

On his part, Gus Wiggle, the founder and principal consultant of Carefirst Consult Ltd, noted that the negative perception of the insurance industry by consumers is largely due to a lack of trust. Wiggle stated that this trust gap is one of the main factors that has held back the growth of the insurance sector in Nigeria, Africa’s largest economy.

He pointed out that one of the main causes of this trust gap is poor communication, saying that insurers need to do a better job of educating customers about the benefits of insurance and the claims payment process.

“Every customer wants you to acknowledge them, so we have to grow to the level of thanking our customers after they have bought our products and engage them before the next year of premium renewal. Let us always look for a way to tell our customers the basic truth about insurance in a friendly manner,’’ he said.

Wiggle explained that the insurance industry can improve trust by using the appropriate communication channels and tone. He stated that it is crucial to incorporate local languages into insurance campaigns, as this can increase insurance penetration in Nigeria. He also mentioned the need to increase the use of digital channels, such as social media and online platforms, to reach more people with the insurance message.

Okey Udezue, an insurance expert, had previously emphasised the need for a communication strategy to improve insurance penetration in Nigeria.

He made this statement during a seminar organised by the Chartered Insurance Institute of Nigeria (CIIN) in Lagos, titled “The Nigerian economy 2019: Issues, Challenges and prospects for the insurance industry.” During the seminar, he observed that there is no clearly defined communication strategy among insurance operators.

Udezue noted that the insurance industry is just beginning to realize the scale of the challenges it faces, and may have underestimated the level of indifference that Nigerians, particularly those in rural areas, have towards insurance. He also noted that effective communication is an important element of the marketing mix.

Despite the potential benefits of new communication approaches, insurers face a number of challenges in implementing them. These include:limited access to technology,financial constraints, and regulatory barriers.

However, these challenges should not prevent insurers from exploring new communication approaches and adapting to the changing needs of their customers.

 Against this backdrop, experts pointed out that insurers can address the challenges of implementing new communication approaches by adopting a customer-centric approach, according to experts. They also noted that rather than trying to impose new technologies on customers, insurers should work with them to understand their needs and design products and services that meet those needs. This would require insurers to build trust with consumers and create a more collaborative relationship.

This approach would also allow insurers to tailor their communication strategies to the specific needs of their customers. By understanding the communication channels that their customers prefer, insurers can ensure that their messages are delivered in the most effective way.

Insurers could collaborate with local organisations to educate consumers about the value of insurance and how it can help them manage risk, experts suggested. For example, insurers could partner with community groups or government agencies to provide information about insurance and the risks of being uninsured.

They also suggest that media campaigns could also be used to raise awareness of the benefits of insurance and the risks of not having it. These campaigns could be designed to reach a wide range of audiences, including both current and potential customers. By increasing awareness of insurance and its benefits, these campaigns could help to reduce the gap between the insured and the uninsured.