Nigeria is one of many countries to have made certain insurance products mandatory, this is to protect individuals, corporations and the country as a whole. The uptake of insurance by all has not been quick or easy – as predicted many Nigerians are reluctant or do not know how to go about getting insurance products.
To help get more of the population insured the National Insurance Commission (NAICOM) has proposed to increase the number and type of product delivery channels. As an example, car dealers, petrol filling stations and shopping malls could be enlisted to help sell Motor Insurance.
This extra push comes after the Commissioner for Insurance, Fola Daniel, stated that the potentials of the Nigerian insurance industry remains grossly untapped in Nigeria in spite of the enormous opportunities available in the market, efforts must be made to address the anomaly.
The agency business would be restructured into individual agents, corporate agents, insurance company agents, micro insurance agents, web aggregators and referrals. The current insurance brokerage sector will be reviewed and restructured into individual brokers, universal brokers and partnership brokers. NAICOM intends to issue guidelines on how the intermediaries could help take insurance to the unreached and make insurance products easily accessible for the public.
All of these issues help address some of the points highlighted by the Coordinating Minister for the Economy and Minister of Finance, Ngozi Okonjo-Iweala in December last year. She identified some key points holding back the insurance sector:
1. Lack of consumer trust
2. Fragmentation of the industry
3. Low enforcement of compulsory insurance policies
4. Lack of professionalism by some agents and brokers in the industry
5. A general shortage of skilled professionals in the entire industry
If insurance is to become more popular in Nigeria then the above 5 points need to be addressed, the challenges need to be dealt with head on. Due to lack of consumer trust, many Nigerians are sceptical and hold a negative perception of the industry.