Nigerian insurance companies are refocusing on group cover plans and partnerships to bring more people into taking up cover, in a nation notoriously low in appetite for insurance.
This development which has swelled the number of insurance policies issued by the market in the last four years, has resulted in premium growth and increased awareness among the populace.
The industry premium is currently put at N319 billion ( as at the end of 2014) from N100 billion in 2007, a more than 200 percent increase, according to figures from the Nigerian Insurers Association (NIA) the industry trade group.
At last count, beyond group life insurance from the public service of the federation, states and big corporates, market associations, transporters, lawyers, and telephone subscribers have been insured in groups.
While Leadway Assurance Company Limited had signed up with the Nigerian Bar Association (NBA), Mutual Benefits Assurance has signed with members of the National Union of Road Transport Workers (NURTW) market women, and of recent, the Ladipo Market Traders Association,- an auto spare parts traders association in Lagos, which has about 20,000 members.
Also of note is FBN, Mansard and Cornerstone’s partnership with telecommunication companies, which has raised the issued policies on that line alone to over 2.5 million in the last two years.
Analysts who spoke to BusinessDay last night, said taking cue from what group life insurance has contributed to the life business, forward looking insurance companies should realise the potential in group packages and key into it.
Insurance is about large numbers, and so, more profitable when it is sold in group to a large number of people. It is cost effective and more rewarding in terms of premium volume, the analysts said.
Akin Ogunbiyi, group managing director, Mutual Benefits Assurance plc, said five years ago, his company realised the need to refocus its marketing strategy, by deploying resources to sell insurance to nook and crannies of the country through partnerships.
According to Ogunbiyi, Mutual Benefits was taking advantage of group partnerships and has offered insurance to numerous associations, including market associations, transport unions and other groups across the country.
“With the support of our micro finance bank, we have empowered a lot of groups and in the process, we are selling insurance to them, Ogunbiyi stated.
Ian Aruofor, PwC’s Capital Projects and Infrastructure (CP&I) West Market leader told BusinesDay that insurance operators in Nigeria need to educate people on the value of insurance and come up with products that address immediate needs of the people, and insurance will sell naturally.
“Insurance products have largely been sold as traditional products, so it has to be tailor made to suit the people the products are sold to.”
“It’s a journey of evolution. If the response is at the industry level and at the company level, both explaining and educating on the benefits of insurance, a lot of progress would have been made over time, on the level of penetration, Aruofor observed.
Ope Osiyemi, managing director, EdgeEdwards, Company Limited, said innovation and research will help the industry address key challenges in the insurance value chain.
The potential is huge and requires that operators think outside the box, Osiyemi said.