Insurance penetration in Nigeria is as low as 0.31% and what partly accounts for this is complex, ambiguous language in marketing the products and lack of friendship and partnership between insurance and consumers. This report looks at the introduction of ‘Buying Insurance is a click away’, a campaign launched to introduce Old Mutual Nigeria’s new website to revolutionalise the sector. Old Mutual Nigeria is a firm that provides financial solutions that are designed to help customers achieve their long term goals and create a positive future for them, their families and their businesses. Daniel Obi writes.
Nigeria’s insurance industry
Typically, medical doctors and auto engineers can make a client pay huge fees for simple problems by employment of technical languages. Contrastingly, some marketers can cause potential clients to develop dis-interest about products through use of technical and complex marketing methods.
This is a case in the Nigerian insurance industry. Over the years, Nigerian Insurance industry has found itself growing sluggishly in spite of huge population of about 200 million.
Insurance penetration is still extremely low at 0.31 %, “even when compared with countries with similar GDP per capita with Nigeria. For example, India has insurance penetration at 3.69%”, according to a 2019 Insurance industry report by Coronation Merchant Bank.
As at 2015, Insurance Industry survey 2015 by PwC put insurance policy holders at 3 million. “Approximately only 1.5% of all Nigerian adults are covered by insurance today”. This, according to the report, means that uninsured Nigerians face risks and require better mechanisms to mitigate these risks as an alternative to the informal arrangements currently in use.
In some other climes, insurance plays much intermediation roles in economic transactions and helps to mitigate risks.
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Need for privileged marketing strategy
The PwC report further attributed the low insurance penetration to lack of trust and confidence in insurance companies and limited knowledge of insurance amongst the public.
As noted by other stakeholders, while agreeing that there is scope to develop a revised market strategy centred on educating the public, the PwC report noted that there is a lot more potential to increase the number of policyholders.
For a long time, the insurance industry has maintained complex and ambiguous system of marketing insurance products and perhaps through the same channels and language. Even when technology and mobile phone have evolved, the industry has not embraced the channels enough to grow the insurance penetration.
Mike Umogun, Lead, marketing and new business at Kantar Nigeria underscored this when he said marketers of products including insurance need to research on the language of their audience and speak to them in same language.
In spite of the need for insurance products, including environmental changes, natural and man- made catastrophes; political changes, including geo-political risks, terrorism; and demographic changes and shifts, only about 1.5% of all Nigerian adults are covered by insurance today.
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Simplifying language and techniques for product sell, Umogun further said enables greater appeal to the generality of the buying and consuming public. “A good marketer must always speak the language of the consumers and not the other way. We all know communication is when the other party gets the message not when you confuse them by your marketing language verbosity”.
Using clear and simple language also enables attainment of marketing objectives which, according to experts are processes engaged by organisations in creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
While agreeing that Nigerian Insurance sector may not have been growing at a rate expected due to complex and intricate language and lengthy forms, Umogun advised that insurance in Nigeria should go through the life journey of the typical Nigerian that are so God-centric and change their marketing model. “Some Nigerians may be seeing insurance as a rip off because God prevented mishap and still insurance people collected and kept the money …haba they seem to be saying by walking away from their policy. Our mumu don do. They want to eat and have their cake ….insurance company must find a way around this … re-educate them the more about the concept of pooling risk which is the bedrock of insurance”.
He advised for new language of marketing insurance, Consumer reorientation and re-education and repositioning insurance companies as partners in progress and not “that company that collects from me and pays me nothing when Baba Godey protects me for twelve months”
Old Mutual new method to deepen Insurance penetration
A new campaign by Old Mutual Limited, the Nigerian subsidiary of Pan-African insurance giant and foremost global financial services provider, with a vision to be their customers’ most trusted lifetime partner, passionate about helping them achieve their financial goals, is expected to be a boost in driving penetration of insurance in Nigeria.
The multinational company which has been operating in Nigeria since March 2013, having acquired the majority stake in Oceanic Life Assurance Company, recently introduced ‘Buying Insurance Is Now A Click Away’, campaign aimed at introducing its new website. This is new thinking from the traditional model of marketing insurance products over the years.
The campaign brings simplicity of language, partnership and technology in marketing insurance products, a move expected to be embraced by consumers as the campaign helps subscribers and potential customers of the firm’s insurance products to achieve their dreams and plan a positive future.
The launch of the new e-commerce website is in line with the brand’s commitment to increase insurance penetration in Nigeria by making it more accessible to customers across the country. Sporting a fresh look and feel, the new site affords users the opportunity to easily navigate through Old Mutual’s uniquely tailored product offerings and make instant purchase of solutions that align with their personal goals, as well as existing customers to make claims
Speaking on this development, Executive Head, Marketing, Old Mutual, Alero Ladipo, noted that launching the revamped website is not only connected with the brand’s drive to deepen insurance penetration in Nigeria, but it is also intended to increase the accessibility of its insurance solutions to help Nigerians achieve a better and more fulfilling future.
“This website speaks to every Nigerian; we want them to think about the great plans they have for themselves and their families, and to seek the right partner to help them achieve those goals. A great future doesn’t just happen, it results when people make the right plans and have the right protection for those plans”.
She added that buying insurance should be an activity that fits into our everyday life and we should be able to purchase insurance ‘on the go’ or make a claim. The claims functionality demystifies that illusion the that ‘insurance companies don’t pay claims’. In Old Mutual we are about partnerships. On the new site you can initiate a claim and you will be updated on progress until payment. This website brings insurance to everyone either through their mobile or laptop. In addition we are just getting started, she said.
The brand draws from its over 170 years of wealth creation and management experience, and its deep African roots, to champion financial inclusion, education and prosperity in Nigeria and across Africa, pushing the message of smart financial planning as the answer to a secure financial future.
Time to pool more consumers into Insurance
Nigeria, the most populous nation in Africa which has brighter future should ordinarily be driving insurance penetration in line with its size in the continent.
As the nation diversifies to grow the GDP from the present $400 billion, it is important that Insurance keys in to this growth plans. As said by PwC report “Growing insurance industry aids in the development and growth of the economy. It encourages savings and investment, job creation and growth in capital markets and financial assets”
It is in this direction that any effort to grow the industry and deepen penetration as being implemented by Old Mutual is welcome to grow the industry from 0.7% contribution to GDP to higher percentage. One way to achieve this is to bring more people to become policy holders through simplification of products, partnerships, re-education and using technology such as mobile to sell insurance products.
