News Africa15 Feb 2021

Nigeria:Price undercutting hits motor insurance sales through mobiles

15 Feb 2021

Third-party liability motor insurance sales through the Unstructured Supplementary Service Data (USSD), channel, otherwise known as mobile insurance, are being undermined by rate cutting, according to insurance practitioners.

This is due to the fact that some insurance companies still sell third-party motor policies below the standard price of NGN5,000 ($13.12). Consequently, most customers would rather buy at the reduced rate than through the USSD channel, reported Vanguard.

This was confirmed by some insurance companies that have embraced the USSD platform in selling their products. They complained about the decline in patronage for that line of business due to the practices of other companies.

The USSD is a simple self-service solution that enables car owners/users to purchase authentic third party motor insurance via their mobile phones. The platform guarantees customer convenience, easy and secure access, real-time interaction and speedy service.

Speaking to Vanguard on the development, the managing director of SUNU Assurances Nigeria, Mr Samuel Ogbodu, said, “The use of the USSD platform to sell motor insurance is a flagship initiative of SUNU in the industry. Unfortunately, some companies are not selling at the rate of NGN5000 at which we are selling; as a result of that, we are getting low patronage, that is why the product is performing below expectations.”

He said that, rather than cut rates, insurance operators should be innovative by building good relationships with their customers while emphasising efficient service delivery.

Another chief executive who spoke on condition of anonymity said that the USSD application which should serve as a platform for customer engagement, claims payment and other after-purchase services is not being utilised optimally. It is being undermined by customers seeking to buy cheap motor insurance.

 

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