Relieving Customers Pain Points in Insurance through Exceptional Service Delivery.

From left: Chief Executive Officer, Almond Productions Limited, Faith Ughwode, Deputy Commissioner for Insurance, Technical, Sunday Thomas; Officer of Guinea Insurance, Tunde Oshadiya and former Managing Director, Niger Insurance Plc, Clinton Uranta at the event.

Kano Hall, NECA House,
CBD Alausa, Ikeja.
Thursday November 15, 2018. ___________________________________________________________

Relieving Customers Pain Points in Insurance through Exceptional Service Delivery.

​​​​​​​​Chris U. Obi, FNIM FNSQ
Ladies and Gentlemen, our topic of discussion is challenging us to share deeper thoughts on customers’ pain points in the insurance industry in Nigeria. It addresses all of us as stakeholders to determine how best we can reduce or erase the pain points? From my desk, the best suggestion is to adopt an industry wide offer of exceptional service delivery, to deepen insurance business in a big country like Nigeria. And you may ask, customer pain points as in what? Check customers’ feelings on processing of premiums, claims, whether they are on time or delayed, truthful or rigged and so on.

Question is, how many insurance companies in Nigeria are really aware of level of customer pain points and are taking steps to do things based on that? If you all do, we will probably not be here today.

By inspection, not a significant number of companies do that.
Neither do we have any serious record of numbers of those who are doing it, nor those faking insurance expertise.
If most genuine insurance companies do, the problem of low rate of insurance business penetration in Nigeria wouldn’t be there.

Insurance Penetration

Insurance penetration is a measurement of insurance relative to the size and extent of a country. It is the extent of insurance services reach within an economy. Available records indicate 0.35% penetration rate in Nigeria, while South Africa, a comparable economy, recorded 15.3% in the same year 2013. It is right then to allege Nigerian Insurance companies are not doing enough to collect, study and work on customer pain points, because if they do, the impact of insurance business on the economy will not be so low.

We are confident this can easily be corrected by adopting exceptional service delivery as a philosophy.
Back to low penetration, there are a host of factors responsible for such a low penetration of insurance service in Nigeria, side by side a comparable economy the size of South Africa and there will be no need for the paradox. Whatever they may be, we are face to face with a huge challenge and a huge opportunity, embedded, being reward for doing the right things that make all the difference.

On the long run, from research findings, Insurance business is well correlated with economic growth in all countries, developed and developing.

The last statement is well supported by research in Nigeria, Africa and the developed world. A high level of insurance business begets a high penetration rate, which implies a corresponding level of customer pains. Conversely, a low level of insurance penetration suggests a low degree of customer pains. So, whatever you may be perceiving as customer pains in Nigeria is not what it should be, because we have an extremely low level of insurance penetration. We have to agree Nigeria is grossly under insured in coverage and that alone is a great challenge and opportunity for national economic growth.
Wouldn’t you rather prefer to record a high level of insurance penetration, which in its wake may escalate the quantum of customer pains, with all the attendant opportunities?
Olayungbo and Akinlo (2016) published a research article, using examples from eight African countries to demonstrate dynamic interactions between insurance and economic growth. Their data results showed, short or long term, there is a positive relationship between insurance and economic growth in some of the countries sampled. Not all the countries showed positive relationship from the start. South Africa did, strongly, but Nigeria is one of the low ends with short run negative effect and for obvious reasons.

Insurance penetration in % for selected African countries.
* Source: excerpt from Olayungbo and Akinlo (2016).

Akinlo (2012) in a related but separate study reviewed available time series data for Nigeria between 1986 and 2010 with a conclusion that “insurance measured as premium has a positive significant influence on economic growth, and that
there is a long-run relationship between insurance and economic growth in Nigeria.”

Later on, after running a number of regressions, Olayungbo and Akinlo also saw the significant link between insurance and growth and development, represented by rate of growth of GDP, in eight selected African countries.

This link has long been known across the developed world that insurance contributes positively to growth and development. That is why developed countries always concern themselves with favourable policies, which create the best environment for insurance to operate, including making several insurance products mandatory for individuals, firms and government agencies. The resulting massive fund, collected as premiums, explains why Insurance commonly own banks, among other prime assets in developed countries.

The reverse appears to be the case in Nigeria, where most banks own insurance companies. The advanced nations appreciate this positive link between insurance depth and economic growth, their laws make allowance for even more penetration for the benefit of individuals, firms and government:
1. Individual benefit – the individual is assured continued enjoyment of his property even in the case of theft or material damage. Insurance, hopefully, does not fail.
2. Firms – with insurance, firms can engage in high risk investment and receive high returns mostly as a result of pooled risks. Insurance reduces firm’s risks.
3. Government – Insurance purchase mitigates the fear of natural disasters like fire, flood, etc. for government
One can very easily identify causes of the low Insurance penetration in Nigeria, in fact too low because of a combination of some economic and social indicators.
The factors all co – exist:
1. What is on the mind of the Nigerian buying insurance products?

Are we not facing a situation of very low level of trust between insurance companies and the insuring public? Insurance business can only thrive in situations of trust that insurers will not renege on their promises to the insured. But over time, the insuring public have experienced abuses and infractions on the situations of their insurance claims and confidence level has waned. Moreover, the situation of our laws, especially in insurance, has been stagnant for too long that both insurers and the insured do not feel fully protected. Even the available laws are poorly enforced, so that there are no consequences for breaking insurance laws, especially by insurers. Rather than deepen insurance, people are scared and confined to only the needful.
In sum, lack of faith and confidence have seriously eroded the trust that must exist between insurers and customers and only a change in the insurance paradigm and offer of a rebranding of insurance can flip the situation.
2. Poverty Index
Poverty rate in Nigeria has been deteriorating over the years. Eighty eight million or somewhat 50% of the population are currently living below poverty line, regardless of chronic paucity and unreliability of data. Insurance premium does not appeal to poor people.
3. Inflation
Inflation is in the double digit, 12.2% in 2014 and 15.5% in 2018. South Africa is better off with inflation at 5.7% in 2014 and still in single digit to date.
4. Nigerian unemployment rate is most probably higher than the 14% reported for 2014 and now 18% in 1Q 2018 versus 26.7% in South Africa 4Q17. Youth unemployment is getting injurious in both Nigeria and South Africa.
5. Disposable income
GDP per capita is a credible measure of disposable income. In 2017 per capita income was $1968.56 in Nigeria and $6160.73 for South Africa. The figures were at $2,177 for Nigeria in 2016 and $5273 for South Africa.
6. Literacy rate
Nigeria had a 59.6% literacy rate out of an estimated population of 190 million in 2017; South Africa had a 94.3% literacy rate out of population of 56 million for the same period. This shows in the huge performance of South Africa (15.4%) in insurance penetration as compared to 0.35% in Nigeria.

Some economic indicators, Nigeria versus South Africa:
GDP per capita 2017​​​​$1968.56​​$6160.73
Unemployment rate 2017​​​18%​​​26.7%
Poverty rate​​​​​​62%
Inflation rate 2014​​​​​12.2%​​​5.7%
Literacy rate​​​​​​59.6% (2017)​94.3% (2017)

There are indications that low insurance penetration in Nigeria is contributing to the existence and, or thriving of other forms of assurance, some of them crude, others simply fallacious. This comes in the form of two familiar situations or challenges – to be forward looking:
1.​Substitutes and palliatives
a. People are resorting to alternatives in Nigeria – The extreme religiosity of millions of insurable Nigerians is partly to hide from insurance issues. They have conveniently wished away the existence of risks in their lives. They will say “I reject it.” And coupled with low levels of disposable income, for many, they do not want to listen to insurance salesmen. It is not justified to describe them as failure of insurance industry to relieve their pain points.
b. The different forms of ‘isusu’ and ‘ajo’ available have replaced or scared off insurance in several places.
c. Some people resort to a doubtful and bogus “African insurance” or some popular Juju, for personal protection instead of life insurance, auto, accident and property insurance.

All these are losses to insurance, out of ignorance, disbelief, mistrust or previous bad experience from insurers. If literacy rate rises in Nigeria in the foreseeable future, these irritant pain points may disappear, trust and confidence will return and insurance penetration will rise. Insurance industry can sponsor lobbyists for the promotion of educational reforms in support of higher literacy rates. Compare the literacy rate in South Africa and Nigeria.


Low insurance penetration can be a positive challenge and opportunity rolled in one, in an economy of close to 200 million inhabitants. If available data is reliable, low insurance penetration in Nigeria is a great opportunity for growth, especially, if insurance companies double down to install framework for exceptional service delivery. Insurance industry can claim the special opportunity by considering creative ways of handling customer pain points. What can the Nigerian insurance industry do to bridge the huge difference between per capita incomes and disposable incomes of the two countries in focus?

Record of very high customer pain points will remain mere statistic, if the efforts to fight and resolve them continue to be successful. High customer pain points, may be, but with speedy resolution of pain point issues to the satisfaction of customers.

Insurance companies should therefore:
1. Prevent the negative experience of customers by giving excellent service

2. Capture feedback from clients, especially the negatives, and resolve issues elaborately to the confirmed satisfaction of customers.

In all honesty this challenge is as urgent in insurance business as in other businesses in Nigeria and even more so in our daily life. I strongly believe we can all relate to it.
As a consumer of insurance service, I will posit that most companies need to upgrade to High Performance (HIPER). As a philosophy, it enables you to achieve exceptional service delivery habitually. Companies have to resolve forthwith to go back and intensively search how to revolutionise respective service culture and delivery, in all areas of the context of insurance business in Nigeria.

High Performance comes with a subsisting culture and a set of certifiable characteristics. This is achievable, even in the face of weak indicators of the Nigerian environment for ease of doing business.

It is within your collective capability to radically change or upturn the Nigerian insurance situation and I have no doubt about your ability to do it.

It is no longer viable to hide under excuses of the economy for non – performance. Nigeria’s position as poverty capital of the world plus the poor rating in ease of doing business should stop blunting your ability to give exceptional service.


Some firms still deliver exceptional service despite the prevailing poor rating of Nigeria in infrastructure. They are predominantly multinational companies in Oil and Gas.
One of the best kept secrets of exceptional service delivery is soliciting and listening to feedback from customers. Here, company processes derive from major wishes, complaints and criticisms of customers. I will like to elaborate on the subject of listening to the customer because it is also the most abused and yet the easiest to do.

Let us talk about a mystery guest at a gathering like this one, where feedback from customers is discussed and turned into source of service improvement. She is the typical Nigerian woman, who fries and sells akara – bean cake – by the road side.

For long, she has derided customer complaints as outright lies, hostile, in bad taste and an outpouring of envy. She angrily dismisses a customer complainant to go and set up her own shop as competitor. Rather than give her feedback and be insulted you either desist from patronising her or swallow your complaint – a sour akara, for example. She is not the only akara seller, after all.

Listening to customer complaints are free opportunities for improvement, higher sales and profitability. But the akara seller example is the opposite, which negative attitude can only bring buyer withdrawal, poor sales and bankruptcy.
In financial services sector, which include insurance and other types of services, the situation of customer service we see every day all over Nigeria, is not far from the akara service example. I urge you to go back and test this generalisation.
Your business processes may lead to good or bad products or services. It has become part of me to note the interaction of processes leading to excellent service anywhere I go. I always itemise and compare the things that work well with those that are obvious poor service. Individually, I suggest to you all, take your own scores and compare as I do.

As a customer, I have experienced abuses from service providers, even in insurance. I was once delayed for two hours on the highway by an overzealous policeman, over a silly error in my motor insurance certificate. And I ask you, what could bring such silly mistake from an insurance professional: work attitude, poor job knowledge, or both?
Before I share with you my best coaching, counselling and mentoring precepts in customer service, there is need to encourage more research that focus on Nigerian and African insurance market place on feedback.

You may start with putting your feelings in the place of the akara customer wanting to give feedback, as in the seller’s example above. What is your feeling being smeared as lying? What about the challenge to you to start up your own shop? Do you feel cheated and insulted just for giving honest feedback? Are you still ready to criticize or give feedback next time?
Available research claim a whopping 96% of customers will not bother to give feedback and quite unfortunately, most businesses do not pay adequate attention to the remaining 4%. Just like the akara seller who has missed the cheapest opportunity for building exceptional service quickly, through listening to customers and building great service delivery on it,
Business in the 21st century has simplified many things through computerisation, globalisation and free flow of information. But insurance business in Africa, particularly Nigeria, appears not to be part of it. The change is not limited to hardware and software, but inclusive of every other thing, like coping with the Nigerian environment of business, Training and developing the workforce, especially on soft skills for attitudinal changes.

Therefore, in Insurance industry, without listening to feedback from your customers, exceptional service may be far away just as you are not cognisant of customer pain points. Listening to the customer is perhaps the most important part of design and strategy to deliver exceptional service and be successful.
Always establish best processes for your company and confirm by a rigorous Business Process Review (BPR) exercise. Ensure their interactions in the best possible manner. For example, salesmen are best placed to interact with the public, consisting of external customers and government agencies. Salesmen are ably supported by those in operations at the back-end, who make the basket of services possible, including elimination of potential complaints. They are internal customers to the salesmen and the quality of service depends largely on their skills and passion. The whole company is populated by customers, external and internal. Internal customers generally make possible the fulfilment of final product and services. External customers buy the products and services for consideration of cash or others.

Top level product planning must ensure insurance products are relevant, affordable and value adding for the ultimate customer. All employees have a fair knowledge of the company’s products in line with the purpose and vision set and shared by top management. Managers and supervisors work the processes to the level of seamlessness; breakthroughs are recorded at different locations until they become repeatable and routine. This is the High Performance level and it is ably supported by industry lobby of government to do the needful – enacting business friendly laws, lifting literacy level and personal income levels. This near perfection can be certified easily to an applicable quality management standard like 6 Sigma and ISO 9000 Quality Management Systems.

In Nigeria, what to do is usually very well known in every industry because of the quality of professionals across industry. Much worse is the despair of why it is not happening in our people. Is it to do with motivation, available living standard, infra-structure or an enduring political or social difference? Statisticians and management economists need to come out with solutions to many Nigerian worker’s case of refusal to be productive.

Let me at this point persuade you to take a position on this matter. Insurance business in Nigeria should be upgraded to accommodate the highest standard of Quality Assurance, on the road to certification to respective quality and professional titles from International Standards Organisation (ISO).
In particular, ISO 9000 Quality certification ensures the full complement of Customer Service as it includes verifiable feedback system, which makes it mandatory to survey customers and use information from such surveys to inform management decisions and actions. And everything can be verified in a perfect data storage and retrieval system.

So, it becomes mandatory to do surveys, collate data from surveys and analyse, interpret and feed them to management as information.

The expected race to the top is a continual journey of initial challenges and step-wise, upward movement, which brings with it customer satisfaction from time to time.


By observation, customer pain points don’t appear formidable in Nigeria with an incredibly low level of insurance penetration at 0.35%, aside 15.3% for a comparable economy like South Africa. Should the Nigerian figure rise dramatically, customer pain points will expectedly rise in tandem. This naturally happens with a corresponding growth in the national economy and other stakeholders. Insurance companies should therefore look out for and remove pain points as rate of insurance penetration rises, even as one may not justly classify the level of pain points in Nigeria as bottom level, in an environment of paucity of data. Expectedly, a high level of insurance penetration may come with a corresponding level of customer pain points and the fear of ability to relieve customers will rightly come to life. It will be interesting to claim several factors conspired to give Nigeria a very low level of Insurance penetration, leaving a high level of pain points.

If we have adequate insurance penetration and a well-documented customer service data, invariably, opportunities arise for growth of nation, company and customers.

We may conclude now that the process should be stretched to include:
1. Listening through questionnaires, phone calls, forums etc.
2. Collating, analysing, interpreting and profiling the information so obtained
3. Passing the information up to senior management approval and implementation.
5. Implementing recommendations to close outstanding issues and to move on.
That in a nutshell is outstanding service delivery.

Thank you for listening.

Chris U. Obi

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