5 Challenges Facing the Insurance Sector are listed and explained one after other in this article for your perusal.
Challenges in life insurance industry
In the 21st century, the insurance industry has been in a state of fluctuation due to emerging technological systems.
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Many clients have placed a high demand on the company especially the expectation that every insurance company should be transformed from keeping an analog system to a digital system with full functional data-driven processes at most within a short period of time.
This demand has been a core challenge facing the insurance industry over a period of time. This article will explore other key challenges facing the insurance industry such as the problem of uncertainty, the problem of patronage of insurance companies in Nigeria, populace illiteracy, the lack of skilled professionals, and the regulatory framework.
1. The problem of uncertainty
The Nigerian market seems to be uncertain or unsure about certain operations of insurance companies. Most times in a bit to attract or appeal to clients or customers to patronize them, the insurance companies can lay unrealized goals to get the attention of the customer.
This can result in uncertainty especially in the delivery of financial services. For example, many vehicle insurance policies from several insurance companies are not maintained. Also, life insurance policies are mostly unsure, especially in cases where the bill seems to be so overrated.
2. The problem of patronage of insurance companies in Nigeria
The issue of insurance industries over recent times is a lack of clients. Most insurance companies have set competitive standards and policies to draw attention and improve customer patronage but it has not turned out as usually excepted.
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In an interview with thousands of workers in the insurance company, it was realized that there is low patronage compared to the esteeming population in Nigeria.
One could simply say that if the number of people that patronize commercial banks is directed to also patronize the insurance companies, this could improve the insurance companies to a large extent.
3. Populace illiteracy
The insurance industry is widely known by the educated populace. It seems difficult trying to conceive the uneducated populace which happens to be more esteeming.
In the northern part of Nigeria, many insurance industries find it difficult to cope or remain consistent in the business for a long period of time.
This insurance industry excels more in dominating cities like Abuja and Lagos and other towns. It is quite easier to educate a cultured and well-trained client about the benefits of the insurance industry and more rigid to educate a man that is not learned about the features and benefits of the insurance industry.
4. Lack of skilled professionals
It is quite surprising that there is a vast number of personnel are employed in the insurance industry. Many of these workers do not have adequate knowledge about how to use technological facilities to access their services.
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It can make the business very arduous when a client decides to operate outside the state. Many insurance companies do not have the finance to regularly train their staff or hire professionals to handle their insurance services. This can cause them to settle for low-skilled personnel.
5. The regulatory framework
The insurance industry is regulated by various agencies that control the monetary structure of Nigeria. Such agencies mainly include the central bank of Nigeria and the stock exchange commission.
The regulatory bodies set policies to control the flow of money in circulation. These policies are major sets to follow and align with certain Macroeconomic structures which may not favor the industry companies in many cases, thus the Nigerian industry like most other industries is affected by the macroeconomic structure.
Aspect from these regulatory agencies that control the monetary structure of Nigeria, the National insurance commission also happens to be another direct body that controls the insurance company. This regulatory framework happens to be very feeble in actualizing its goals and policies.
The National insurance commission globally has a deficiency in administration structure, supervision, regulation, and control of the insurance business in Nigeria.
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In the bit to adapt to these technological demands, insurance has to deal with these key challenges. Most people even disseminate wrong information about insurance industries which can limit the market demands and cause the business to decline. This is due to the importance that information plays a major role in the nature of any striving business in Nigeria.