Challenges Facing Insurance Companies In Nigeria

Challenges Facing Insurance Companies In Nigeria
Insurance companies in Nigeria, West Africa and the whole of Africa suffer a lot of challenges.
These challenges are as a reason of, but not limited to the lack of funds, lack of trust by the masses as a result of previous cases of fraud or scams and lack of interest among the masses.
Many people don't believe they're ever going to suffer any mishaps, so they do not see any needs for the insurance but who prepares for such occasions? Many also have heard stories of people who experienced difficulties while trying to access their insurance funds and so it discourages them.

What Is Insurance?

Quoting the web finance business dictionary, "Insurance companies are businesses which provide coverage in the forms of compensations for mishaps like injuries, damages, treatments and/or hardship all in exchange for premium payments from the clients."
Simply defining it, it is when you make an agreement with someone (an insurance company) and you pay them some agreed amount of money to refund you if you suffer any mishaps as per the items agreed. The items could be houses, vehicles, companies or even human.

We cannot assure ourselves that we'd never suffer any losses in our business, so there is always a need for an insurance. You need them to help you get back to your feet with your deposited funds, since the money is still yours.
There are many insurance companies in Nigeria and they all depend on your choice and location.
We will list a few of them below from which you can make a choice.

Insurance Companies In Nigeria

There are a lot of amazing insurance companies in Nigeria. They are all popular depending on your exposure and a few of them include:
- Custodian Insurance plc
- IGI Insurance
- Aiico
- Lead way Insurance
- Consolidated hallmark insurance
- NEM Insurance
- Staco Insurance plc
- Niger Insurance plc
- Mutual Assurance plc
- Gold link Insurance and a lot more.
The insurance institutions are so many and vary with types of services they offer. The most suitable insurance plan for everyone, whether business or individual all depend on some factors, such as their type of business, job, health status and level of income.
There are so many types of insurance available to Nigerians.

Types Of Insurance Available To Nigerians

There are so many types of insurances available to Nigerians, and all are tailored to suite your needs.
A few include:
- Motor insurance: You can use this to cover your automobiles and other vehicles in the case of an accident, theft or any other mishap. They will compensate you with an agreed amount of money to help you take care of the issue.
- Fire insurance: This covers any loses or damages caused by fire accidents and breakouts.
- Marine insurance: This covers any damages or losses of terminals, cargo, ships and/or any cargo by which property is acquired, help or transferred between the final destination and the points of origin.
- Burglary insurance: This is designed to help you cover up for any cases of theft or burglary.
- Personal accident insurance: Also known as PA, it is an annual policy that provides compensation in the case of disabilities, injuries or even death caused by accidental, violent, external and visible occurrences.
- Aviation insurance: Aviation insurance is geared to take care of risks involved in riding aircraft.

- Credit insurance: This protects your company or agency against losses due to the failure of your customers to pay up trade credit debts which they owe you.
- Health insurance: Health insurance covers for your health expenses.
- Life insurance: This covers for the death of someone, they pay your family or any designated individual in the case of the loss of a life.

Each kind of insurance have its own terms and conditions and you need to be familiar with them before you make a choice. However, it is sad that in Nigeria insurance companies and agencies are poorly patronized. These agencies make the most of their money from firms and companies who are already aware of the benefits of these and stick to them and only less that a percentage of Nigerians have an insurance cover.
One of the major reasons for this poor corporation is that they do not know the importance of insurance.

Importance Of Insurance

I should have names this importance of insurance to Nigerians, but it is also general. Insurance is generally important to everyone, whether African, Asian, American or anywhere. We all need them.
We will see some of the importance below:

- Provision of security against losses

It helps reduce the stress of thinking about what you'd do in the case of some material, financial or business losses. You can even insure a life.

- Boosting of the economy

The investments of people into insurance is invested into other sectors, thereby creating more opportunities for people. It can even be given out as loans which means more development of individuals.

- Financial recovery

In the case where you are unfortunate to partake in a mishap, the insurance covers for the losses and you get back to your feet sooner than normal.

- It encourages saving

People save more when they are coerced to do so, that is the power of insurances. You have to save as you have agreed with the agency.

- Provides peace of mind

When you have financial security, you automatically have a peace of the mind. Thanks to insurance, they will provide you with the required peace of mind.

Challenges Facing Insurance Companies In Africa

There are so many challenges facing this huge market, that despite all these amazing benefits, they still suffer low patronizing in Africa. African countries like Ghana, Togo, Nigeria, Chad, South Africa, Niger, Mali, Ivory Coast and so many others still have a high level of illiteracy.
The issue of poor education standard in Africa is really something else, but we are gradually getting over them. Countries like Nigeria and Ghana now have amazing schools and we are thankful for that.
However, there is still poor awareness amongst the masses, in the terms of insurance and related trends. 

Major Challenges Facing Insurance Companies In Nigeria And How To Solve Them

They are yet to see reasons why they should trust a percentage of their earnings with them.
These and many more are some of the major challenges faced by these insurance agencies and we will see them below:

- Poor patronage by the market

The insurance firms are poorly patronized, and most times get discouraged and might fold up. This is because they do not see any needs to invest in them. You can tackle this by creating awareness among the masses and your target market, especially through education.

- Poor awareness in the side of the masses

A typical African knows insurance exists, but might not know what it is used for. It is the duty of the agency and government as a whole to make the people aware of the benefits embedded in this.

- Lack of interest of the masses

Most people feel like they're never going to suffer a mishap, so why insure? This is not good as we cannot actually chose to have accidents.

- Lack of infrastructure

Insurance companies and firms still make use of manual equipment and it is telling on them. They need to upgrade like banks and see their profit go higher.

- Poor risk management

The insurance companies sometimes fail to play their own roles in the management of our risks and you know the result - lack of interests! Everyone loses interests and they begin to fail.
They should take people's investments more serious if they want to make more profits.

- Lack of innovation

Without innovation, business gradually goes down. Insurance companies need to be innovative in all rounds.
They need to make sure their businesses meet and satisfy their customers's requirements so they will keep coming back.
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