Mr Idongesit Mbat, the Director of Data-Plus Integrated Consulting, was Head, Research, Strategy and Corporate Communications at Law, Union and Rock Insurance. In this interview with ONYEKORMAKA ASABOR, he stresses the need for insurance companies to embrace digital marketing
As an insurance expert, what is your take on the attitude of majority of Nigerians to insurance services?
The average Nigerian is not concerned about insurance. This jaded insolence of most Nigerians towards insurance is usually as a result of either a lack of education or wide-ranging indifference towards insurance, or both.
However, in today’s insurance market, advertising has been disrupted by digital technology, so much that relying on only analog sales methods may be unproductive. In fact, as it is, solely relying on analog sales approach can influence the bottom-line of any insurance company negatively.
You are, no doubt, calling on insurance policy marketers to key into the advantages inherent in modern methodology, particularly the internet. Can you expatiate on marketing insurance policies on the pedestal of digital marketing?
First and foremost, the modern technology of insurance system can be traced back to the 17th century, while insurance on its own dated back to 800 BC. Recently, the decision-making process preferred by the customers has changed dramatically. With the internet, customers have become more informed about the packages available in and benefits of insurance policies. Unlike in the past, when the insurance agent was the key source of all the information, there are now tools that can do the comparison for the customers in a matter of seconds.
Against the foregoing, it is important for insurance companies to adopt modern marketing methods to reach a maximum number of potential customers.
In this context, what are the few important tips you can recommend for insurance companies to improve their brand presence in the market with the help of digital marketing?
Let me start by saying that insurance companies can use different channels to spread their brands’ messages. Most insurance companies in the past mainly operated within the offline sphere. However, today, the mode of advertising is getting mixed with online platforms. But most of their marketing approaches are still based on offline promotions.
It is important for insurance companies to expand their footprints over different platforms available in the digital world. From YouTube to Facebook, Instagram to Twitter, every platform has its own charm and reach. Having a uniform and equal reach on all platforms will definitely help companies.
Where does an insurance company that needs to adopt digital marketing as its means of selling its policies start from?
It is advisable for such an insurance company to have a well-structured and user-friendly website. For any brand, whether it is insurance, banking or real estate, a website is one of the most important parts of the portfolio. However, having a website is not enough. It should be well-structured with all the necessary information about the packages and plans, such as health insurance quotes available for customers. When an insurance company promotes its brand over different online platforms, only a fraction of information reaches the readers. The detailed information is generally on the landing page, which is accessible via the anchor link provided with the ad or the social media post. These landing pages are detailed information pages available on the website.
Also, the customer should not feel that the website is cluttered. It should be easy to navigate with a soothing colour scheme. Again, selling insurance plans to customers does not mean that the customer will willingly come back for a policy renewal. Keeping tabs of expiring policies and staying in touch with the customer is not an easy task. While maintaining the relationship with existing customers, it is important to add new customers. All this can be achieved by using content marketing tools as a part of the marketing strategies. Using search engine optimisation techniques to improve the organic reach of the website can definitely improve the brand’s image in the customers’ eyes.
It can be done with the help of Search Engine Optimisation content with target keywords and phrases. The content can be a blog post, social media post, info-graphic, video or artwork.
How can the customers be engaged in one-on-one interaction on social media platforms?
Social media is the ultimate source of traffic and new customers. It is very important for insurance companies to have official verified accounts on different social media platforms where customers can reach out to the representatives with queries and complaints.
A quick response team for social media platforms will help keep the customers happy. A customer in distress that contacts the insurance company on Twitter or Facebook should get a reply in a short period of time to solve the problem as soon as possible. Insurance companies can improve their customer service through Chatbots.
What use will chatbots be to an insurance marketer in this context?
A chatbot is a computer program designed to simulate conversation with human users, especially over the internet. In the past few years, the use of chatbots has increased exponentially. These bots are easy to create and you can answer basic questions in the system. The chatbots will answer the customer on social media platforms almost immediately and send a detailed request to the representative for further assistance.
What do you think should be done to make the insurance industry more relevant to the national economy?
There is one negative issue that has literally refused to leave the industry, and that issue is nothing but low insurance penetration. It is one issue that has kept cropping up in any forum where insurance is discussed. Appreciable level of insurance penetration cannot be attained without total commitment by all industry stakeholders.
For many decades, many of the reasons insurance penetration has not occurred is because, first, you don’t even have payment platforms. For you to get insurance penetration, what you are saying is that you want to take insurance to the grassroots.
Low insurance penetration is among the challenges faced by insurance companies in Nigeria. Do you think the challenge resulted from poor marketing efforts?
Not really. Before we talk of deep penetration of insurance, we should also not forget that the people we expect to make the wish possible through their premiums are, each passing day, managing their lives with limited disposable income; not to talk of some of them that lacked education on the benefits of life insurance. In fact, the insurance companies in the country are facing the challenges of mistrust and negative perception of the industry, poor distribution channels, and delayed claim payments; though it has, to some extent, reduced. But the people still think delay in payment of claims still exists. Another debilitating challenge the industry is faced with is inflation.
In fact, the foregoing factors were identified as key challenges facing the Nigerian life insurance industry.
How can these challenges be tackled?
Tackling the challenge can be herculean, particularly when viewed from the perspective of the fact that life insurance costs are considered discretionary spending by many Nigerians. However, given their limited disposable income, the opportunity still exists to encourage greater participation by channelling customer feedback into innovative product design to capture customers outside the traditional areas of focus.
Also, most Nigerians have a tendency to leave things to chance by relying on divine providence and the benevolence of their extended family members for the survival of their own family, rather than careful financial planning. Thus, proper education about such benefits would improve this situation.
Again, mistrust and negative perceptions of the industry, caused by exceptions in policy offerings, lack of transparency and agency issues, as well as lapses in the claim settlement process, can be solved by increased interaction between insurance companies and policy-holders using technological platforms such as websites and the use of customer data analytics. Presently, few Nigerians have insurance covering their lives and property. This presents immense opportunity for insurance companies to widen their distribution channels and entice more people to purchase insurance policies.
Traditional distribution channels can be widened through partnerships with banks and telecommunication companies to reach the neglected and uninsured populations.
Delays in claim payments are caused by complicated claim settlement systems. To me, rather than the situation signalling a state of hopelessness, it should be seen as opportunity to build long-term relationships of trust with clients by simplifying the product structure, as well as by properly disclosing all caveats or exclusions to the contract before a final agreement is reached. As things stand, not doing the needful do not inspire confidence in the market.
There are opportunities for growth in the life insurance industry in Nigeria. Many international brands have recognised this and have moved into the market. It is, therefore, imperative that the deep cracks in the system be sealed to ensure that companies provide the most appropriate services to policy-holders and inspire confidence in them.
It appears you are not concerned about health insurance? Most people seem not to key in to it. Don’t you think the people need to be educated about this?
Sure. It is one area of insurance that most people would first indicate interest. In fact, it is one area of insurance that people easily understand and connect with. This is because the risk of falling ill is so real and common that people don’t need to deny its existence. I think every person must have fallen ill at some point in time; so when you ask them, for instance, “If you fall sick now and there is no money, what will you do?” You would notice a short silence and nobody says, “God forbid.” But if you are talking about motor insurance, and you say, “Suppose an accident occurs involving your vehicle…” and before you finish that statement, you will hear everybody echoing “God forbid, God forbid.” Although there is a way of subtly presenting these issues to them, this shows the reactions that can be got at first and also indicates that sometime we live in denial and therefore fail to take necessary preventive or remedial actions that limit our losses if disaster happens.
There are enormous opportunities for the players to grow the health insurance subsector. Major players, or rather partners, in this area of insurance are the medical doctors. Concerning the issue of believability of insurance offerings, if a medical doctor talks to people about the need to subscribe to health insurance, the probability of acceptance is higher than an insurance marketer doing so. This is because the marketer is seen as coming to sell his product; while the doctor would be believed as a result of the professionalism and authority he has in the medical profession.
You alluded to the challenge claim settlement. How will you rate insurance companies in terms of claims settlement?
I can rate the insurance companies comparatively, but there is no data for such comparison. However, I think the industry as a whole has done well. The regulator also has done exceptionally well in terms of holding insurance companies to live up to their promise to customers. I can give them above average. But a lot more still needs to be done.
As someone who has been in the mainstream insurance industry on managerial position for more than a decade, and still playing in the sector on consultancy basis, what would you say is the greatest challenges of the industry?
I think it is the issue of rates. Not rate cutting. It is the inability of the industry to charge adequately for its services. Consider this: When I joined the industry in 2002, the premium for third party motor insurance cover was N5,000. Fifteen years after, the premium still stands at N5,000 and even with the tendency to go down, while the cost of motor claims has continued to rise. For instance, the cost of replacing a car’s headlamp in 2020 will be higher compared to this year. It’s amazing that the industry still survives despite this challenge! How would one ever expect the industry to grow that way? With the general increase in the prices of goods and services, interest rates and worsening exchange rates, you still see insurance premiums stagnating and even declining. It is a dangerous issue the industry players must work on, and urgently too. For me, pricing is the greatest challenge of the insurance industry. If the industry can overcome this, it will overcome all other challenges.
What do you think is the cause of this problem and what solutions are available for the industry?
There are many reasons that can be adduced to this. One of these is the problem of ignorance and the general lack of awareness of the importance of insurance to individuals, families and businesses across. This is the cause of low demand for insurance products. Where you have low demand, it becomes very difficult to increase prices. The few buyers of insurance seem to detect the prices. There is this fear that if you increase the price, you risk losing your customers to competitors who are ready to reduce their prices. So this is where “rate-cutting” issue comes in. You see underwriters taking to price reduction as the major competitive tool. This should not be so. The earlier the industry players moved away from price competition, the better for the industry and the insuring public.
If this continues for long, it will gradually erode the industry’s financial and underwriting as well as shareholders’ value.
