Election Year: Boom for Insurance?

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Sunday, January 13, 2019   0845AM / By  Ekerete Ola Gam-Ikon

 

Promises, Voters, Candidates (PVC) are three pillars that the insurance industry in Nigeria can use to redefine itself and enjoy a boom every four years.

 

An entirely new vista, the 2019 general elections present the greatest opportunity for the insurance industry to sell insurance to Nigerians and achieve, if not surpass its target of N1 trillion Gross Premium Written (Turnover) by 2020.

 

Unfortunately, this industry of risk bearers does not seem prepared to take neededrisks. Is it not said that success occurs when preparation meets opportunity?

 

In a previous article recently, How Promises Connect Insurance and the 2019 Elections, I posited that "Any insurer that has not thought of harnessing the opportunity of the 2019 general elections to sell promises of "voters insurance" to over 30m Nigerians, especially with the emergence of insurtech, is not ready for the kind of growth that is possible today." While I may have sounded hypothetical to most insurance professionals, I am glad a few agreed that, indeed there are opportunities which could be pushed through the voters.

 

Safe in the Crowd?

 

I had asked, "How do you feel amongst a teeming crowd of supporters in an open field with your only assurance being gun-wielding security personnel?" The dangers faced by the sea of heads we see in pictures and videos are untapped opportunities for insurance; but operators would wave it aside viewed from the point of claims that could arise. 

 

What if there is a law that compels organizers of campaign rallies to have insurance cover as a condition precedent to approving the rallies? Or should there be an unexpected incident at any of these rallies, would we then say: There should have been Event Insurance in place? Probably. Why then are insurers and brokers not keen to publicize this so that such an insurance policy can be put in place before voters attend these rallies?

 

Incidentally, INEC just informed us that there are over 80m registered voters. If 8m (10%) of these potential policyholders troop out to vote with either a Life or Personal Accident Insurance cover, it will massively deepen insurance penetration in Nigeria. Currently, it has been reported that less than one percent (1.92m) of the population (192m: 2018) have one form of insurance policy, so you can appreciate why there ought to be a blistering awareness drive now.

 

The campaign rallies of 91 registered political parties holding across 36 States and FCT within the month of January and February 2019 is the kind of opportunity our operators need to exploit. After all, no one wants to die but everybody seeks protection of financial value.

 

Performance Bond for Promises?

 

And our insurance professionals will not stop laughing this off with questions like: Where will you get reinsurance treaty for that?

 

This is my response! Insurance has got an excellent opportunity to contribute to the increasing drive for good governance and only needs to help candidates ahead of the general elections manage the promises they make.

 

Typically, insurance promises to indemnify policyholders in the event of the risks crystallizing but political office aspirants and holders merely make promises without indicating any buffers if they fail, either to win the elections or to deliver what they promised during the campaigns. 

 

Insurers need to develop new products or repackage existing ones that will ensure voters are put back in the position that they were before the elections or before the administration came into power.

 

By simply enlightening elite voters to demand for a Performance Bond from candidates could produce a veritable source of premium based on the Federal Government Budget for the previous year (in this case 2018) as the sum insured! How much is 5% of N6trillion?

 

Rather than sneering at this developing concept as some of my insurance professional associates would do, we should abhor the effrontery with which the promises drop from the lips of our candidates and get the idea working!

 

If voters can demand Performance Bonds from candidates with the professional expertise of insurance operators, a couple of serious candidates could accept such criteria and we will begin to see some level of discipline in our polity.

 

Again, no one really wants to lose. If football clubs could take insurance like Real Madrid did against losing the UEFA Champions League some years ago to survive a bankruptcy scare, then why not political office holders and aspirants. Afterall, both are games!

 

The Future is Now

 

For the insurance industry in Nigeria to break forth and take a strong position in the emergent socially connected environment, it must respond positively to the issues that continuously stress people across all levels, especially in the space where the government and citizens engage.

 

The time to do this is now because waiting for the future denies the current breed of tested insurance professionals the opportunity to be part of the historical development of the insurance industry in Nigeria. 

 

Let us think together now and solve the problem future generations shall commend us for, afterall, insurance in itself was an idea introduced by merchants, just like politicians.

 

Do not just go out with your PVC, get an insurance cover because the person you are going to vote for is covered. 

 

Let's make insurance work in Nigeria!

 

About The Author

Ekerete Olawoye Gam-Ikon, MNIM, CPP is a management consultant with specialization in Strategy and Insurance. He can be reached vide telephone on +234-806-648-1111 and +234-802-585-0344 or by e-mail vide olagamola@gmail.com


 

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