Nigeria Celebrates 60, Insurance Sings

Insurance
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Monday, September 28, 2020  / 10:08 AM  /By Ekerete Ola Gam-Ikon  / Header Image Credit: Ecographics

 

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Nigerians that have had the opportunity of celebrating our Independence Day Anniversary at the stadium would better understand what insecurity, economic instabilities, social maladies and political bickering have caused us. It used to be a day of display of our pride in diversity and joy in togetherness; a day we looked forward to in every State across the country.

 

It was the reason to have a stadium and cenotaph where wreaths were laid in honour of our late heroes and the season to showcase our cultural attires and dances.

 

As that era fades and is replaced by digital images of a greater Nigeria, which we equally celebrate and anticipate, the insurance industry SINGS and it is important Nigerians take note.

 

SINGS represent five (5) things the insurance industry does and will continue to do for, and with, Nigeria namely Stabilise, Invest, Nourish, Guarantee, Sustain.

 

Quite often, we take the roles we play and the things we say for granted about our dear country, Nigeria, and miss to notice the little actions others are consistently taking towards keeping all of us above the sinking level, like insurance SINGS.

 

1. Stabilise

When risks, common and complex, crystallize, those individuals and businesses that had insurance policies would tell their stories differently from the uninsured amongst us.

 

It is important to know that before and since Nigeria's independence, the insurance industry has been there to make the country more resilient especially through prompt settlement of claims that enables individuals and businesses to rebound and even expand.

 

At different levels of government, we still see representatives appear at scenes of infernos to promise reliefs and not much is heard thereafter. With insurance, nothing is even heard when the experts visit, assess the damage and subsequently return to pay the claims on insured cases. For the fact that those claims payments bring the businesses back to continue providing employment, pay taxes and support their communities, governments at all levels should collaborate more with the insurance industry to create that stable environment we all need to continue to contribute to our national development.

 

Individuals and businesses are bearing far too many risks that ought to be transferred to or shared with insurers.

 

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2. Invest

Licensed operators in Nigeria's insurance industry are faced with one of the stiffest investment policies and guidelines, just to ensure funds are readily available to settle claims and honour other obligations. The policy issued by the regulator, National Insurance Commission (NAICOM) stipulates that funds should be invested in instruments that are liquid or near liquid for ease of access when needed.

 

Accordingly, insurers are known to invest mostly in treasury bills, term deposits and investment papers, which provide funds that governments derive their domestic loans from. Just like pensions funds have become the biggest source of domestic loans for the Government of Nigeria, funds from Group Life insurance portfolios are growing and would increase into the future.

 

Yet, it should be noted that these huge funds are pooled from a mere five percent of our adult population having retirement savings accounts and a meagre two percent within the overall Group Life insurance base. Much more investment can be available from the insurance industry with more Nigerians taking long term insurance.

 

3. Nourish

When you can save by taking up insurance policies and seek to secure the future of your children/dependants with individual life, educational and funeral policies, rather than pain and anguish, families are nourished to remain on good course in life. This is the principal reason insurers are required to settle claims promptly and appropriately.

 

Only those who have experienced timely compensation from insurers would understand the nourishment that insurance brings at those moments of grief and bereavement. Insurance claims payments have restored families, businesses and assets that would have been lost forever; and individuals and businesses that were uninsured and suffered losses or damages have been known to go into extinction because there were no insurance compensations to save them.

 

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4. Guarantee

Issuance of bonds, sureties and guarantees may not be the special preserve of the insurance industry however theirs have proven over the years to be one of the acceptable instruments to safeguard contracts and see them to fruition.

 

Massive construction projects have depended on bonds and guarantees of insurance companies to execute multi-year contracts successfully and we have enjoyed the use of those infrastructures that have resulted from them without knowing the role of insurance in the process.

 

Today, digital solutions, as others before them, rely on guarantees provided mostly by insurers to keep their architecture working for our benefits. Mention must be made of the value of credit guarantees provided to enhance trade financing for exports and imports between Nigeria and other countries.

 

More opportunities exist for insurers to provide guarantees in an environment where trust is low.

 

5. Sustain

Prior to COVID-19, climate change was probably the greatest fear of the sustainable development world and this may not have changed as we seem to be reaching the resolution part regarding the pandemic, yet the insurance industry is responding to these changes in our risks ecosystem. Then, there is cybercrime that is emerging as a stronger threat to our new normal lives.

 

The insurance industry responded to the unexpected destructions of 9/11 and tsunami and the hurricanes, however, with improved technological solutions, we can have more predictive analysis to reduce the impact on insurable interests.

 

Climate change is increasingly disrupting the way we live, farm and move around and we have to pay more attention. We should not assume that Lagos has always been flooded and step out unmindful of weather reports because the conditions have since changed and we are better off accepting them rather than wish them away.

 

The ability to predict introduced by tech firms have forced collaboration with insurance companies as well as climatologists to ensure the effect of resultant losses or damages are minimized.

 

As insurance leads other non-traditional sources of finance to unlock resources needed to achieve the Sustainable Development Goals (SDGs), the industry is investing in the journey and we have to understand this to enjoy the songs we hear as we celebrate Nigeria's independence.

 

The linkages necessary for our stabilization plan to succeed should be anchored on insurance.

 

Our insurance industry SINGS and we will hear if we listen, now and always.


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About The Author

Ekerete Olawoye Gam-Ikon, MNIM, CPP, is a management consultant with a specialization in Strategy and Insurance. You can contact him via e:mail olagamola@gmail.com and mobile +234-806-648-1111


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