A report by Cubecover, an Insurtech firm, has revealed multiple factors driving Nigerians away from insurance even as it highlighted that only about 3% of Nigerians have insurance coverage as of 2024.
Co-founder and Technical Officer of the company, Samuel Ishie, presented findings of the Cubecover survey during the company’s brand inauguration in Lagos.
According to him, several factors including high cost, have contributed to the apathy of Nigerians towards insurance.
“Low awareness is a major challenge, people don’t understand the benefits of insurance, and even if they do, they don’t know how to access it.
“Another factor is that many Nigerians cannot afford insurance premiums, and even if they can, they may not have access to insurance products,” Ishie said.
Trust deficit
Ishie noted that the survey also highlighted a trust deficit, with many respondents expressing skepticism about the ability of insurance companies to pay claims.
“We discovered that a lot more people want insurance, they want the protection, but there are several barriers for them to get that protection. So part of what we started working on was removing those barriers,” he said.
- To address these challenges, CEO of Cubecover, Deji Macaulay, said the company has partnered with mobile networks, fintechs, and health providers, including MTN, Glo, Airtel, and Palmpay to make insurance products more accessible to Nigerians.
- He said the company plans to expand this to government workers through the National Health Insurance Authority (NHIA).
Role of telecom in insurance
Speaking during the event, Chief Digital Officer at MTN, Aisha Mumuni, highlighted the role of telecommunication companies in shaping the future of insurance distribution, citing Nigeria’s mobile penetration rate and the over 150 million active mobile connections as opportunities.
- Mumuni emphasized the importance of increasing insurance penetration, noting that telecommunication companies have the infrastructure and expertise to reach the public.
- She noted that MTN had partnered with companies like Cubecover to provide insurance services to its customers.
What you should know
While general insurance has been at its lowest ebb in Nigeria, a new public opinion poll conducted by NOIPolls revealed that only a 19% of adult Nigerians are covered by health insurance policies in the country.
“Unfortunately, most adult Nigerians (79%) are not covered by the scheme as they pay out of pocket for healthcare,” the report stated.
This corroborates Dataphyte’s publication of December 24, 2021, which reports that Health insurance has barely scratched the surface in Nigeria with regards to percentage coverage of the population as 97% of Nigeria’s population is not covered by any health insurance; the alternative to health insurance is huge out-of-pocket spending on health.
In 2018, Nigeria ranked the third highest country with the highest out-of-pocket health spending as 76.6% of health spending in the country was out-of-pocket.
