life assurance talk in nigeria

  LIFE ASSURANCE TALKS IN NIGERIA

The success of on going efforts by both government and insurance industry operators to deepen insurance market especially through retail insurance has been tied to effective use of mobile telephone on insurance product distribution.
Insurance managers are therefore urged to see the use of mobile telephones as important marketing tool for their products.
This according to industry observers if combined with agency system of product distribution will definitely give insurers wide clientele base like the banks and cover the present gap between Nigerians and insures. The gap between Nigerians and insurance has been put at 94 percent.
Speaking on the relevance of mobile phones in insurance product distribution recently, General Manager Micro Ensure Ghana, Mr. Peter Gross at a breakfast forum held in Lagos recently noted that underwriters can provide micro insurance to the teeming informal sector by using the mobile network operators services platform.
In his words “Providing micro insurance through the ubiquitous mobile telecommunications platform is the only available means of developing products to insure the critical mass that form the informal sector in Nigeria and allow the insurance industry to increase the level of insurance penetration.”
According to him,Since the informal sector forms a significant part of the Nigerian population, insurers in the country should collaborate with Mobile Network Operators (MNOs) to sell insurance products to this large population.
Gross urged insurers in Nigeria to collaborate with MNOs in order to deliver insurance services to the doorsteps of average Nigerians.
He observed that micro insurance penetration is low in Nigeria because of a few faulty assumptions within the insurance community.
According to him, these assumptions include such remarks as, “We don’t believe that 70 per cent of Nigerians can be insured. Insurance is not in demand or cannot be understood by the target client base. If insurance for the poor must be low cost, it therefore must be low value. The poor face more risk, so we have to account for. We can use our basic policies and strip them down.”
He quipped that faulty assumptions in the insurance community have ultimately led to faulty products such as low-value credit life products, heavy conditions and exclusions that erode consumer trust, insurance processes that do not account for rural realities and administrative systems that cannot handle millions of clients.
Besides, Gross pointed out that micro insurance penetration is low in Nigeria on the buying side because most Nigerians think insurance products are too expensive. “They do not trust the insurers enough.
“They think insurance products are not available and they also feel that no one has explained it to them,” he added.
He however warned insurers that collaborating with mobile operators to provide micro insurance is not a guarantee for success if the right approach is not adopted. While listing what he termed success requirements, Gross said the requirements for successful use of mobile channel to drive micro insurance should include products that drive channel’s core business, simplified processes, minimized operation expenses, commitment to the micro market, capital must be patient and “insurers should develop the right partners,” he advised.
Also Milliman Actuaries and consultants international, a global specialist in actuarial and life insurance consultancy will early next month sponsor a training programme/workshops on the use of Banc assurance and mobile telephone in the distribution of life insurance products.
Addressing the media on the programme ,managing director Actuary consultants middle East ,Africa and South Asia,Mr Debo Ajayi said the programme which will attract insurers from African countries including Nigeria is targeted at training insurers on the use of mobile telephone in insurance product market as well as how to engage banks in the distribution of insurance products even in the face of the CBN directive on banks to divest form their non banking subsidiaries. He said the workshop will train banks to understand insurance and the inherent benefit for them in the marketing of insurance products.
He said Nigerian banks are not too eager to marketing insurance products because they felt it is not their core area but maintained that the workshop will make banks appreciate insurance products and their role in insurance industry even after divestment from their insurance subsidiaries. According to Ajayi, through the workshop, bankers will understand that the CBN in this divestment directive does not mean that there should be gap between banks and insurance companies.
He said the second part of the training will expose insurance firm operators on the use of mobile phones in insurance product sales and marketing adding that it will also expose them in the use of mobile phones in premium collection, claims settlement and in payment of commission. He said the workshop will expose even drivers and travelers on travel insurance as well as teach them how to use mobile phones to secure insurance policy while on transit.
He said Nigerian insurers who attend the workshop will enjoy the benefit of using actuarial knowledge obtained to ensure life insurance penetration in the country. According to him, life insurance is like an appendage in Nigeria budget and needs to be pushed further to get to the target audience by building the necessary technical base. The workshop he said will equip participants on the relevant skills. He said resource persons who are versatile in actuarial science from different countries of the world have been carefully selected to handle various topics to be treated at the workshop.
The management of African Alliance Insurance Company Limited, one of the oldest life offices in the country, has said that micro-insurance will remain the backbone of life insurance business in the country now and in the future.
Managing Director of the company, Mr. Alphonsus Okpor, stated this in an interview with THISDAY in Lagos. He said that since group life business is not reliable, adding that the only way for any life company to survive is to embrace micro-insurance.
“Micro-insurance is what we are doing here, that is individual life insurance. For me, I look at this area as the back bone of life insurance business because in that area you will charge adequate premium and pay your claims as they occur. From experience, we have discovered that it is even more profitable than the group life insurance. “In the group, not many states of the federation have bought into it and we are currently struggling for the Federal Government portion which as we are talking they have not even paid premium for this year.
So if you want to wait for them to make your money then you will go hungry and might even die before then,” he said. Okpor also advised other life insurance companies in the country to take a cue from his organisation and develop their individual life businesses, saying micro-insurance is the way out for life offices. “You have to develop micro-insurance or individual life insurance which comes in trickles but runs into millions. This is the strength of life business and I will advise life companies to strengthen individual life business so as to produce steady income for their companies.
“Group life business will come any time but now that many states are not even implementing it saying they don’t have money, are we going to force them? Individual life business is the main thing and it is the future of life business,” the African Alliance boss stressed.


The management of African Alliance Insurance Company Limited, one of the oldest life offices in the country, has said that micro-insurance will remain the backbone of life insurance business in the country now and in the future.
Managing Director of the company, Mr. Alphonso Okpor, stated this in an interview with THISDAY in Lagos. He said that since group life business is not reliable, adding that the only way for any life company to survive is to embrace micro-insurance.
“Micro-insurance is what we are doing here, that is individual life insurance. For me, I look at this area as the back bone of life insurance business because in that area you will charge adequate premium and pay your claims as they occur. From experience, we have discovered that it is even more profitable than the group life insurance. “In the group, not many states of the federation have bought into it and we are currently struggling for the Federal Government portion which as we are talking they have not even paid premium for this year.
So if you want to wait for them to make your money then you will go hungry and might even die before then,” he said. Okpor also advised other life insurance companies in the country to take a cue from his organization and develop their individual life businesses, saying micro-insurance is the way out for life offices. “You have to develop micro-insurance or individual life insurance which comes in trickles but runs into millions. This is the strength of life business and I will advise life companies to strengthen individual life business so as to produce steady income for their companies.
“Group life business will come any time but now that many states are not even implementing it saying they don’t have money, are we going to force them? Individual life business is the main thing and it is the future of life business,” the African Alliance boss stressed.
 MICROINSURANCE IN NIGERIA