Why Nigeria’s Insurance Industry Is Not Doing Well— PwC

PriceWaterHouse analysts have deplored low patronage of insurance services in Nigeria

In a report titled: Insurance penetration in Nigeria,the analysts explained that the industry growth is  stunted due to the apathy of investors who believe that insurance firms are not well managed, thus affecting profitability.

They said aside from the regulatory issues which operators in the industry are grappling with, poor patronage of insurance in Nigeria could be blamed on relationship management by some insurance companies which sometimes is below par because an average customer simply wants to be comfortable.

They said such relationship challenges have their basis in weak corporate governance and risk management framework which sometimes make the companies seem unfriendly particularly when there are claims to be made by customers thus creating doubts about how well the insurance companies may be trusted.

They added:”At the heart of this, customers often complain about the lack of flexibility and technology-driven innovation in terms of the kind of insurance policies and packages that meets today’s upwardly mobile audience of contemporary insurance,.

“The implications of these challenges on the industry are rife. For instance, in 2018, the Enhancing Financial Innovation & Access, EFinA report stated that of the 99.6 million adult population in Nigeria, only 1.6% have insurance covers even though nearly 40% of them have access to financial services. According to the survey, lack of awareness remains a key barrier as a massive 77.2% of the adult population are not aware of insurance. Although largely due to the knowledge gap, the low-income level of the citizens makes it difficult to be convinced of buying insurance on a risk that may not happen, the benefits notwithstanding.

They maintained that if the growth in the insurance industry can be achieved, it will aid development and growth in the economy, encourage savings and investment, aid job creation and growth in capital markets and financial assets.