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A Study On Why Many Nigerians Are Not Insured – Research

A Study On Why Many Nigerians Are Not Insured – Research

A Study On Why Many Nigerians Are Not Insured – Research

 

Insurance is a necessity that everyone in a family, business or workplace should purchase. Many developed countries like the United States make these policies available to all, and at every level can benefit from it. Countries with great human and material resources employ this as a necessity or criteria for work to take place.

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However in Nigeria, the most populous country in Africa, it is not so. There are millions of Nigerians who do not see the need to get involved or insured. Although the statistic of insurance during the 2019 survey as shown below affirms the lack of involvement of Nigerians. But this article is targeted at getting the root cause.

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A Study On Why Many Nigerians Are Not Insured – Research

 

SEE STATISTIC BELOW

  • Only 1.9 percent of our adult population had one form of insurance policy as at 2018 (National Financial Inclusion Strategy Report);

  • Insurance penetration to our Gross Domestic Product (GDP) was 0.3 percent in 2019 (National Bureau of Statistics);

  • Out of 11.7m registered vehicles (NBS 2018), only 2.5m have genuine insurance cover evidenced in the Nigerian Insurance Industry Database (NIID) domiciled in Nigeria Insurers Association (NIA);

  • Over 80 percent of the Gross Written Premium (GWP) recorded in 2019 was attributed to corporate businesses (NIA);

  • Lagos State accounts for about 83 percent of the Total Gross Written Premium of the insurance industry in 2019 (NIA);

  • Brokers and agents accounted for about 78 percent of the GWP of N473b in 2019 (NIA).

The results of the statistics is a proof that Nigerians in the majority don’t have insurance plans and this is why :

1. POOR SENSITIZATION ON THE BENEFITS OF INSURANCE BY AGENCIES

 The first reason why many Nigerians are not insured is the lack of awareness of the benefits and importance to mankind. There have not been in recent years adequate sensitization in both urban and rural communities. A lot of Nigerians are oblivious of this and therefore would not invest in what they know nothing about. There is a need for Insurance agencies to sensitize people and be deliberate about it. Adverts and commercials alone are not enough to do this, seminars and talk shows should be employed in order to make this a reality.

 

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2,  THE FALSE IDEA THAT IT IS ONLY MEANT FOR THE ‘RICH’

When most people think about insurance plans what comes to mind is that it is meant for the wealthy and high classes in society. People shy away from things that appear to be interesting to the wealthy because they believe they cannot afford them. A taxi driver in Kwara state does not see the need to get car insurance because he feels it’s expensive or it will cost more than he can afford. Whereas, there are insurance plans that are quite affordable at every level.

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3, RELIGIOUS BELIEFS

Religion plays a major role in the decisions and affairs of people in Nigeria. What they eat, wear, sell, buy, where they work, live and so on. A typical Nigerian is religious by default. When you tell a man to prepare for the days of danger, they can reply to you with the saying that no evil will befall them for they have faith and believe.

If the religion is against it whether it is beneficial or not faithful will not partake in it. A line of thought would see insurance as pre-empting evil or tragedy to occur.

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4. RECESSION

Another reason is the skyrocketing increase in commodities, goods and services in Nigeria. The increase in the cost of living and yet on the same minimum wage would not encourage the average Nigerian to spend extra. Even though it is to secure the asset or commodity. Recession makes it difficult for the average Nigerian to invest but easier to save and spend on what is needed now. Only those with foresight and knowledge invest during an economic meltdown.

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5. LACK OF TRUST 

Are they trustworthy brokers around? will they deliver? These questions if not properly answered would stop Nigerians from getting involved. With the increase in fraudulent activities and crime, there is a big question mark on the authenticity of any product or package. Can a  broker be trusted?

 

in conclusion, many Nigerians are not enlightened on the benefits of getting insured and thus, the low number of those involved. If these agencies put in more efforts to get people sensitized in rural and urban areas via seminars and talk shows the number will drastically increase.


AllInsuranceHUB is a blog for everyone who seeks an informative, educative, and knowledged based online insurance and investment community. We share Top-notch investment tips, finance news, insurance policy details and much more. You can read and share thoughts, ideas, and opinions on the finance market and get real-time updates from around the globe.

IBEH C. JOE

Financial analyst, Entrepreneur, Blogger and Business model

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