PwC decries poor insurance management in Nigeria

PricewaterhouseCoopers has blamed the low penetration in Nigeria’s insurance sector on poor management by the operators.
In a report titled “Insurance Penetration in Nigeria”, it observed that the industry was performing below its risk capacity evident from the low patronage.
According to the firm, the sector, if successful, will support development and growth in the economy, encourage savings and investment, aid job creation and growth in capital markets and financial assets.
It noted that insurance stocks on the Nigerian Stock Exchange, NSE, were not performing well as they should, given the apathy of investors, who believe that insurance firms are not well managed, thus affecting profitability.
Besides, 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 that is sometimes is below par because an average customer simply wants to be comfortable.
Such relationship challenges, according to the report, 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.
“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 report said.
According to PwC, 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 per cent had insurance covers even though nearly 40 per cent of them have access to financial services. It noted that lack of awareness remained a key barrier as a massive 77.2 per cent 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.