Despite a surge in financial risk raised by inflation, currency depreciation, job insecurity and climate-related disasters, most Nigerians continue to ignore insurance products.
According to data from the National Insurance Commission (NAICOM) website, insurance penetration in Nigeria remains below one per cent, far lower than the African average of three per cent.
This is despite recent efforts by government agencies and insurance firms to increase awareness and introduce digital platforms for easier access across the country.
Stakeholders at various forums agreed that the reluctance of many Nigerians to accept insurance is driven by a combination of mistrust, poor awareness, cultural perceptions and economic hardship.
Speaking about the development, policyholders of a popular underwriting firm, Adekunle Banjoko, a retired banker, said the average Nigerian sees insurance as an unnecessary cost. In a country where many are struggling to afford basic needs, paying premiums for an uncertain future feels like a comfort, he said.
Banjoko also noted that many Nigerians associate insurance with bureaucracy delayed claims and outright fraud.
Stories of policyholders battling for months or even years to receive payouts have deepened doubt.
Also sharing his bad experience with one of the popular insurance firms, a civil servant, Olusegun Adeleke, at an insurance conference held in Lagos at the weekend, said I insured my car in 2023 and after an accident occurred, I had to chase the insurer for five months before I could receive my claims payment.
He called on insurance operators to reduce the cumbersome claims documentation process in the country.
Frustrated customers have taken to social media to share their experiences, highlighting the emotional and financial toll of submitting multiple forms, police reports, Affidavits and other paperwork to get paid.
The insurance sector, on its part, acknowledges the problem but blames a lack of trust, low-income levels and regulatory gaps for the slow growth.
“We are seeing more digital adoption among the youth, but the numbers are still too small to shift the needle,” said a former Managing Director of FSL Insurance Broker Limited, Alfred Daudu.
Daudu noted that there is a need for a stronger partnership among fintechs, regulators and influencers to change perception.
According to him, some innovations are gaining traction. Micro-insurance low-cost plans tailored for farmers, small business owners and engagement workers are slowly making inroads, he noted.
Startups are also leveraging mobile technology to distribute simple, affordable policies that could solve consumers’ problems.
