Insurance, as we know it today, is a BUSINESS of NUMBERS and still satisfies the original idea of managing risks in a collective manner for the good of one. The more the number of people and businesses we have subscribing to insurance, the better our chances of addressing the issues that hinder and break us.
It is not just a business because of how it is operated and its clientele but also due to the expectations of the impact it would have on those that subscribe to it.
These expectations of the impact of insurance have attempted to redefine its essence, especially since the turn of the century and reclassification of global risks. We have seen changes in our climate become almost as deadly as terrorism and forced policymakers to reconsider the focus on agriculture as the preferred alternative source of revenue.
Even the resultant shift to the use of online platforms have also exposed us to the deadlier threat of cyber risks and invasion of our privacy, which solutions seem far-fetched though under urgent consideration.
The magnitude of losses and damages we have seen since last year, and continuing, have prompted questions about the ability of insurers alone to respond to the expectations of their policyholders. Activating the provisions of the law to compensate insurers that have settled claims is an exciting conversation amongst insurance professionals.
What will happen if insurers become unable to honour their obligations to policyholders that suffer from risks within the conditions of their insurance contracts?
Risks That Are Not Transferable
Sometimes, to convince potential policyholders about insurance, salespeople in the business have said "we can insure you against any risks", which is not entirely true and that is where the conflicts that would later arise in the relationship start.
The classification of risks by citizens differ from that of insurance professionals. For example, the former sees poverty as a risk that must be exterminated, not managed while the insurer, at best, will be looking at their health conditions and propose health insurance at affordable rates, in a manner of addressing the poverty issue.
The convergence of thoughts, challenges and solutions therefore becomes necessary to ensure that citizens get protection and live better predictable lives that constantly keeps them above the poverty line.
However, this will need to start with rethinking insurance as a social service!
Several programmes of governments at all levels, faith-based organisations, social groups and international initiatives focused on poverty reduction, disease control and prevention, hunger, youth unrest and sectional conflicts would be better delivered and sustainable with insurance as part of the social service strata, not necessarily the commercial side of our lives.
Citizens supported by these programmes need medical attention when malaria strikes and insurance products are now available at affordable prices for possible addition to the benefits of the programmes. It is saddening to see or hear of fellow citizens who are beneficiaries of such programmes yet unable to receive medicare when required on account of not having money.
Risks occasioned by fear of an unsecured future have forced many to accept inhuman and corrupt lifestyles, sometimes accepted as hustling, rather than rely on insurance which is the promise of an assured future.
Interestingly, these citizens understand and practise contributory savings, irrespective of culture or religion. It enables them to plan towards acquisition of houses, cars and bank balance to finance their lifestyles but only a few "invest" in their health, child education, retirement and family support in the event of death; areas covered by insurance.
Of course, the challenge of bringing the knowledge of insurance and its benefits to our citizens is before us and we are needing to do more.
Insurance Communicators Needed
Communicating insurance in every facet of our lives is imperative to achieve our desired level of insurance penetration.
Especially when we seek inclusion as we are currently doing regarding the place of insurance among financial services, we will need to consider less traditional but effective means to communicate our offerings.
Firstly, adopting insurance as a social service would mean that more of the benefits will be emphasized in the content of respective programmes. Imagine if every working committee or project team has an insurance person as a member with ten minutes of every outing to speak about the benefits of insurance to the audiences.
Before and during this period of the COVID-19 pandemic, Nigeria could count an average of 350 public events per month, indicating the potentially available channels to communicate insurance. The traditional and new (online, mobile, social) media exposure that follows such events are best imagined.
Particularly, reaching our young population in schools, informal sector and civil society organisations would be the most desirable point of communicating insurance into the future. After all, social services are not only essential and available but also accessible and affordable.
Secondly, as we have had concerning the introduction of certain social services, it might be necessary to subsidize the cost of insurance for defined categories of citizens and businesses. Nigerian Social Insurance Trust Fund (NSITF) is a good example of how the government has positioned to intervene in the insurance sector however there is the greater need to use the funds for the development and advancement of insurance as a social service beyond its current mandate.
For example, some Nigerians receiving monthly stipends from several government programmes could be assisted to take insurance, such that upon expiration of the project, the insurers would be there to honour their obligations. Also, it is well known that farmers receive subsidies with respect to the insurance of their farms and produce, especially when they are exposed to loans, and this can be extended to other players in the informal sector.
In the limit, insurance as a social service would be a vital part of emergency management, when injuries or deaths are recorded. Presently, we receive assistance in response to our appeals whereas insurance would have obliged as the definitions of a social service.
Even on the commercial side, that a few insurers have been less honourable would not make insurance incapable of being a social service. Indeed, communicating insurance in the ways described here will expose malpractices and violators whilst the information thereof will empower customers to decide.
With today's customers, it would be even more exciting when the information by insurers and access for customers to ask questions can be done using multiple tech channels, something that still does not happen a lot despite the heightened adoption of digital solutions since COVID-19 pandemic.
The proposition to have insurance as a social service would, in my opinion, strengthen the case for including insurance in the mainstream of development planning and personal financial planning.
We can stop wondering why insurance does better in the advanced economies and start testing the ideas/concepts we have around making insurance work for us, NOW!
Recent Insurance Report