In Nigeria, many firms do not carry insurance. Although insurance firms have existed since 1918, few businesses employ them.
According to Intelpoint, approximately 96.4% of enterprises do not have any insurance. Let’s take a look at five major reasons why insurance isn’t popular among Nigerian business owners.
1. Lack of Awareness
Many business owners struggle to understand insurance. They don’t understand how to get insurance or why it’s necessary. Even though insurance firms attempt to educate individuals about insurance, their efforts have been largely unsuccessful. Many business owners continue to underestimate the importance of insurance and how it may benefit them.
Insurance is quite expensive, and many small firms in Nigeria cannot afford it. Most small businesses earn less than the lowest insurance premium they would have to pay. This makes it difficult for them to even consider purchasing insurance.
3. Scarcity of Sales Agents
There aren’t enough people selling insurance. Many people who start selling insurance leave within two years because they don’t make enough money, the work is difficult, and they can’t fulfill their sales targets. There are fewer individuals accessible to explain insurance to potential consumers, making it challenging for firms to learn about and get insurance.
4. Cultural and Religious Beliefs
Some Nigerians feel that their faith will protect them from negative occurrences, thus they don’t need insurance. These attitudes make individuals less likely to purchase insurance because they do not perceive it as a necessity.
5. Mistrust of the Insurance Industry
Many Nigerians do not trust insurance firms. They believe that insurance provides insufficient benefits and is overly complicated. They are concerned that even if they pay for insurance, they will not receive the assistance they require when they are in need.
