Old Mutual General Insurance Company has called on Nigerians to embrace insurance as a means of mitigating all forms of risks in their lives and businesses, noting that increasing rate of insecurity of lives and property in Nigeria, occasioned by some natural factors, political and ethno-religious factors, calls for urgent response.
The Executive Director, Technical, of the company, Japheth Duru, who stated this in Lagos, stressed that in recent years, there has been increase in natural disaster, terrorism, financial crisis and disease outbreaks, that have affected the quality of life of an average Nigerian, yet many Nigerians are averse to taking insurance cover.
Duru said: “In fact, as people venture into life’s daily routine at work, on the road and even at home, their lives and properties are exposed to risks in various forms.
“Families have to deal with loss of loved ones, health emergencies caused by accidents or illnesses; home and property owners face the risk of burglary, flooding, fire attacks and building collapse; business owners have to deal with the risk of damage and theft to their business premises and assets; vehicle owners are also faced with risks of motor accidents, aggravated theft and third party liabilities.
“Apart from the grief experienced with these risks, the resultant financial loss can be more destabilising. While these risks may seem distant from our comfort zones, they cannot be completely eliminated and since man has not devised a means to ascertain when risks will occur; the need to mitigate against exposure to acute financial loss becomes crucial.”
He said in the light of this mounting risk of financial insecurities, insurance has been identified by experts, as an important tool to mitigate against exposure to risk, adding that insurance guarantees peace of mind and financial security to the insured.
He regretted that despite this critical realities, current trends showed that Nigerians were yet to truly embrace insurance as a tool for risk management.
“At 0.3 per cent, Nigeria, has a staggering low insurance penetration in comparison to counterpart markets in Africa. South Africa has 14.7 per cent; Kenya 2.8 per cent and Angola 0.8 per cent penetration rate,” he said.
Duru pointed out that even with an estimated population of over 196 million people and a growing middle class, the National Insurance Commission (NAICOM) had reported that only 1.8 million of the over 96 million adult population have any form of insurance.
According to him, the 2018 industry report on Health Maintenance Organisations (HMOs) by Agusto & Co. had shown the low level of health insurance coverage in Nigeria, which was estimated to be at 5.1 per cent.
“What this means is that in event of an unexpected health challenge, many Nigerians will have to rely on out-of-pocket expenses to settle their medical care.
“This is not far from reality as there has been a rising case of Nigerians resorting to online crowd funding campaigns to foot the huge bills of severe medical conditions, a situation which ideally insurance would protect against, “he stated.
He said for business owners operating in Nigeria’s tough economic and policy climate, the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) had reported said that only 35 per cent of SMEs have a form of insurance to protect against business risks.
The company’s Marketing Executive, Alero Ladipo, added: “When we compare Nigeria to other emerging markets, we have discovered that Nigerians are yet to fully grasp the importance of embracing insurance to mitigate the financial loss caused by risks that abound.
By having this knowledge of insurance, we believe Nigerians will be able to make sound financial choices for their families and businesses.”