Sunday,
January 17, 2020 /11:13 PM / OpEd By Ekerete Ola Gam-Ikon / Header Image
Credit:Yumpu
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!
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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