THERE is need for a communications strategy to boost insurance penetration and acceptance of insurance by Nigerians, an expert has said.
The expert, Okey Udezue, spoke at a seminar organised by the Chartered Insurance Institute of Nigeria (CIIN) in Lagos.
The event had as theme “The Nigerian economy 2019: Issues, Challenges and prospects for the insurance industry”
Udezue said there was no defined communications strategy by the operators.
He listed other challenges facing the industry to include lack of innovative products and poor integration of technology.
He said the industry is only just waking up to the enormity of the task confronting it and may have underestimated the level of apathy that the typical Nigerian, particularly those living in rural areas, has towards insurance.
He stated that the promotion used to create awareness, persuade and reassure the people is key to the marketing mix.
Should communications strategy be left to individual firms or should some aspects be left to the regulators while the operators focus on various aspects under an integrated marketing platform? he asked.
He said the industry should note that during the period the Central Bank of Nigeria (CBN) was pursuing a vital communications strategy to actualise cashless banking, individual banks created their own strategies to exploit the opportunity to get many non-customers open accounts with them.
Another challenge of the industry, he said, is inadequate training and skills of some workers in the industry.
He said: “The law of natural selling, which states that ‘nobody will spend his money to buy anything unless by so doing he will be better off than before’ points to another issue that is creating a challenge for the industry. Given that the revenue in the profit equation is all about ensuring continuing growth of sales (insurance premiums), the question arises as to whether or not those that actually go out to sell insurance have the necessary training and skills to win over the many skeptical people across the nation, especially those that live outside commercial cities.
“As marketing gurus would say, selling financial services is different from selling tangible products and requires special skills that go beyond merely presenting and listing features of products to prospects. And because financial services are the same from company to company, the ‘messenger’ (the seller they see) is the one that will make the difference and must be bought before his ‘message’. This means the insurance seller must possess and exhibit skills and techniques for surfacing the non-verbally expressed emotions of the buyer in addition to having great product and industry knowledge. Or else, how can he speak to his priorities?
“The future of insurance selling calls for a shift from features-oriented marketing to benefits-focused customer engagement. And beyond the need for a general upgrade of selling skills, there are also issues with the dearth of trained actuaries’professionals, underwriting and general brokerage experts. The industry should be concerned that not too many students enrol for insurance-related subjects in the universities. A proactive response may involve working with the universities (NUC) to evolve a strategy to attract more people into these programs. How it responds will be critical for achieving agreed future performance milestones.
“It is significant that the banking industry, when faced with similar issues and challenges, set up their training academies to equip prospective new hires into their banks with knowledge and skills for preparing them in meeting and dealing with issues and challenges peculiar to provision of banking services to Nigerians.”
He further stated that the issue of lack of innovative products is one of the top (if not the top) reasons for insurance exclusion challenging the industry. If the growth of revenue in the profit equation is critical for growing the industry, perhaps, this is a good time to single out for industry attention.
Given the statistics on people living with extreme poverty and the demographic distribution of adults with survival income, the commitment to expand the market for insurance will be frustrated by the absence of innovative products that can be used to tap into the vast untapped market, he noted.