Insurance

Desired insurance retail penetration: The “Baba Alajo” as a metaphor

Tope Adaramola

One thing that is constant in life is change. Through times and ages, societies have often found ways to thrive. Human beings have figured out ways to add value to each other in order to have a rewarding and fulfilling life, and by so doing, maintain societal economic equilibrium or stability.

For those of us who grew up in the traditional African society, especially in the South Western Part of Nigeria, where this writer grew up, would not find it difficult to recollect the roles that thrift collectors, popularly referred to as “Alajo” in the Yoruba language plays in oiling the wheel of commerce and sustaining the economy of the pristine society.

The mention of Baba Alajo (the “Baba” is added to the adjective simply because elderly men ply the trades most) brings a sharp reminiscence of a roving or peripatetic thrift collector who goes about, most times, on bicycles, motorcycles or later tricycles, collecting daily contributions from their clients, mostly petty traders, artisans and others down the ladder of life, against the raining days. Mostly cresting on native intelligence, the “Baba Alajos” are adroit in local book keeping skills, to the extent that off hand, it was not a big task for them to remember the financial position of each of their numerous clients.

The size of clientele under the purview of each “Baba Alajo” depends on the size,integrity or referrals done for the collector, as well as his track record and experience in the trade.

At the start of contributions, it is customary that the first contribution is often the “seed money” coming as gain for the thrift collector while subsequent ones belongs to the contributor. Depending on the circumstances and agreement reached, clients may collect lump sum of their monies on a weekly, monthly or even yearly basis in some few situations, to meet unfolding or pressing financial expectations.

Baba Alajo on a duty.

The “Baba Alajo” is seen as the succorer in the period of economic challenges, as many of the clients or contributors depend on him for payment of school fees of their children when it is due, purchase of farm seedlings or start off petty business or rejig one as the case may be. No doubt, the “Baba Alajo” plays a crucial role in the society until recent times, due to the blitz of change in the financial services system with the emergence of mega credit and financial institutions taking the centre stage.

Definitely, aside from Banking and other financial institutions, one sector that could take a cue from the operation of the “Baba Alajo” is the insurance industry which is direly in need of ideas for creating awareness and acceptance. Inspite of the multifarious benefits that insurance has to offer to national and individual economic stability and societal progress, only few Nigerians give it a thought in their order or priority, unlike what we have in the advanced climes.

As the industry is striving to evolve strategies to grow its reach, especially at the grassroots and in retail aspects towards sustainable financial inclusion, the metaphor of “Baba Alajo” has come handy. Needless to say that there is a positive inspiration that the industry operatives could draw from the “Baba Alajo” in driving growth. But to drive this home properly, it is quite apposite to highlight and correlate some of the attributes identifiable with the thrift collector, as well as draw inferences for the insurance industry:
Simplicity;

Of Presentation: The beauty of the operation of “Baba Alajo” is the simplicity of his presentation of thrift to his clients to the extent that even the most crass illiterates could comprehend his message and know the rights and entitlements that is due him or her at the end of the day. Each client has a contributor’s card, simply design to explain how much was contributed and how much is due, with columns for token commissions collectable.

If the insurance industry would appeal to a cross section of retail clients, this form of simplicity must be emulated by Brokers, Agents or Marketers of Insurance Companies as they case may be. In a situation where policy wordings are complex, windy and not easily understandable, potential clients, especially at the rung of educational ladder becomes scared and suspicious, inhibiting their embrace of insurance.

Of Language: Language is a strong medium of persuasion and control. The “Baba Alajos” actually exploit this in bringing home their marketing streaks to the lower level people, who see them as we we, rather than we and them.

Modern day insurance sellers could borrow a leaf from this. In a situation where a company is prospecting an illiterate market woman or artisan in a locality and sends a savvy or “being-to marketer” to prospect them such category of people would not gel. Mutual destruct is rife in a situation where language barrier is existent, hence insurance strategies needs to take this into cognizance in deploying marketers to certain clients. It is often believed that empathy comes when there is mutual understanding of one another through similarity of language and communication.

Of dressing and Carriage: It is often said that first impression lasts longer. Also, for you to befriend someone you must reach the mid-point with him or her in the way you dress and carry yourself.

The “Baba Alajo”, whether wittingly or unwittingly, dresses in a way that does not project him as having a air of superiority to his clients. Infact many times he comes around in his bicycle or motorcycle projecting a disciplined or Spartan life style. Little wonder the clients could put all their financial eggs in his basket even without anything that looks like a collateral around him.

The moral here is that the modern day insurance operators should device a way to get down to base with their retail clients through their dressing and carriage. In a situation where a marketer or agent of an insurance company comes to prospect an artisan or petty trader in a brand new latest model car, he has already simply created a complex issue for the potential client and definitely reached a dead end.

Of flexibility in meeting urgent demands: Baba Alajo, though strict in their operations, have a way of ensuring flexibility in circumstances that demands for it. A case of emergency could lead to slight bending of rules for a loyal and committed contributor. Having stood with the contributor in the times of need gets him “covenanted” to the “Baba Alajo” come rain come shine.

The Insurance industry could borrow a leaf from this by putting human face to their policy wordings and operations in the event of a client suffering a loss. Many, shy away from insurance because they have an impression that it is just an arrangement where the insurance people keep taking and taking without consideration for them in the event of suffering a loss.

Having an arrangement where some measure of financial returns or rewards are given yearly to clients who do not suffer any misfortune for certain number of years will covenant the clients and kindle in them the hope that insurance can at least give back to them, even when a loss has not been recorded.

Of Personalized Service: There exists a strong bonding between the “Baba Alajo” and the contributors. In the African society, it is often said that: “face to face is far better than a thousand letters”! Therein lies the place of personalized service rendered by the Alajo who carefully notes the personal profile of his numerous clients, knowing them even sometimes beyond the day to day business relationship.

They have personal relationships with him and he also knows them well. They could put him in confidence, sometimes about their personal financial challenges, while he in turn advises them on what to do. The bond is strong and unbreakable, to the mutual benefits of the two parties. This could be emulated by Insurance operators. Many clients have lost hope in insurance due to the fear that the insurance institutions they may want to deal with are too official and impersonal.

The marketer that collected premium today may be redeployed or changed his job tomorrow and no one for the client to relate with. For the industry to break the ice ceiling in selling its products, particularly to the down trodden, this aspect of operation by the thrift collector must be taken into consideration.

As the insurance industry, its constituent bodies and regulatory institutions are still finding ways to grow the industry, it is important to continually glean some wisdom from the environment as was done in this writing. There is nothing really wrong with the industry but it only needs to tweak its strategies towards meeting the yearnings and expectations of its potential numerous clients.

Aside from the several internal and external challenges that had precluded the industry’s growth and expected penetration for years, it should not be lost on the operators that insurance is a pure service that cannot be assessed using any of the physical senses-it’s an abstraction that cannot be directly examined before it is purchased.

A prospective purchaser of most goods is able to examine the goods for physical integrity, aesthetics, taste, smell etc. But contrariwise, hand, pure services such as insurance have no tangible properties that can be used by consumers to verify its value. Services like insurance can only be felt by ingredients of personal care, reliability, friendliness and simplicity of the distribution channels.

This appears to be the sense that “Baba Alajo” has deployed for so long and the insurance industry could emulate some of these traits to achieve its goal of growing its existing large retail market and by so doing meet its much desired financial inclusion aspirations.

Tope Adaramola, the Assistant Executive Secretary of NCRIB

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