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COVID-19: More and more Nigerians are opting for health and life insurance

By on April 14, 2022 0

The Nigerian insurance industry is seeing increased consumer appetite for health, life insurance and other related policies as a result of the COVID-19 pandemic and associated economic uncertainties.

According to industry analysts, the motivation is that many people are becoming more aware and willing to deal with their financial shocks, serious illnesses and other negative impacts of the pandemic which has been compounded by inflation.

Improving financial innovation and access (EFInA), in its 2020 Nigeria Financial Access Survey, observed that about three in five adults have experienced a financial shock or event that has had a significant negative impact on their finances in the last 12 years. months, primarily due to medical emergencies, inflation and the impact of the COVID-19 pandemic.

According to EFInA, of the 2.1 million adults insured in the new microinsurance scheme, most consumers focused on health, auto, life and education policies.

Ganiyu Musa, chairman of the Association of Nigerian Insurers, said there had been an increase in demand for health, life and asset protection insurance since the COVID-19 and EndSARS crises in Nigeria.

Musa said many people have realized the need to protect themselves and their loved ones with insurance solutions that allow them to plan for the future.

According to him, the market is reacting to the development by increasing awareness of the benefits of having insurance, especially in difficult times.

This development, according to most insurers, is what is driving their new quest to have health insurance subsidiaries in their basket of operations.

However, PwC analysts say that as carriers (insurers) move from their initial response to a longer-term strategy, they will likely need to adjust their approach based on changes in consumer behavior.

“Financial stress correlates with dissatisfaction – but insurance companies can improve customer satisfaction by introducing alternative rates, bundling plans and, of course, upping their digital game,” they said. .

EFInA said that out of the 2.1 million microinsurance policies sold, demand for health insurance (medical and critical illness) accounted for 45% of the total policies issued in Nigeria, while life insurance accounted for 17 %.

Motor insurance (car/vehicle, motorcycles) accounted for 16% of total policies issued, while the children’s education plan accounted for 11%.

EFInA notes that the lack of appropriate information about insurance and the low level of trust in insurance institutions are major obstacles that have held back the uptake and use of insurance.

However, he highlighted the various demand-side and supply-side challenges that are hindering adoption. On the demand side, he listed weak customer value proposition and product bundling, challenges when settling claims, superstitious beliefs, religious reasons and lack of trust in the micro-retirement scheme.

On the supply side, he listed inadequate/inefficient distribution channels, high cost of the microinsurance scheme, insufficient profiling and understanding of the Nigerian microinsurance market, and no testimonial marketing .

Also Read: Providing Essential Solution to Deepen Penetration in Insurance, Retirement

According to Biodun Adedipe, Principal Consultant at B. Adedipe Associates Limited, what insurance customers need is peace of mind, and they’ll be willing to pay for a solution that gives them that.

“The fundamentals of excellent customer service include a clear understanding of who your customer is; the problems customers want you to solve for them; how, where and when they want these issues resolved; what they are willing to pay for the proposed solutions and how much they value your relationship with them,” he said.

the National Insurance Commission (NAICOM) continued its efforts towards financial inclusion and deeper market penetration with the licensing of six stand-alone microinsurance players and a few teller operators. He focused on technology to improve access to insurance.

“We’re exploring ways to take insurance to where other financial sectors are or even surpass that mark because financial transactions are more of a one-stop-shop for everything and it’s either we get in or we lose the activity for the benefit of more innovative outlets. who will take it away from us,” said Sunday Thomas, Commissioner of Insurance.

He said the commission would unveil a sandbox to make room for innovative expansion of insurance reach.

Thomas said NAICOM’s recently released web aggregator guideline aims to open up access to insurance and create a convenient marketplace for insurance.

He added that he also led industry investment in digital capabilities and automation, such as the launch of the NAICOM portal and the launch of the BimaLab project.

The BimaLab Insurtech Accelerator platform screens, coaches and mentors insurtech companies, granting them access to the FSD Africa BimaLab Grant Fund to develop innovative business solutions focused on solving compelling economic or social problems, Thomas said.