How insurance products can grow economic value chain for Nigerians
Underwriters have stressed the need for Nigerians to embrace insurance products as a lifestyle, and not as regulatory necessity that would increase the economic value for both individuals and organisations in the country they added.
People consider insurance mostly for vehicles because of regulatory requirements mostly to keep their activities alive, but hardly reflect on the key roles underwriting firms and policies offer to play in stimulating the economy.
Also, consumers have become accustomed to routines that they often don’t realise the risks and uncertainty they face every day, such as motor accidents, house fire, flooding from a big storm, or an injury at work, which brings unexpected hardships from one moment to another.
Indeed, insurance can help manage the uncertainty and potential losses by providing vital financial protection when disasters strike, without which many individuals in these situations would be financially-strained and could even face bankruptcy.
As with consumers, insurance helps businesses mitigate risks that can have a lasting, positive impact on the economy as businesses also face financial stress due to disasters and unforeseen challenges.
When disaster strikes, insurance is one of the best financial tools businesses can call upon to help tackle these challenges, only when the policy was taken ahead of the disaster.
Insurance also helps to drive growth as it enables businesses to undertake higher-risks, higher-return on investment than they would have without it.
The Managing Director/Chief Executive Officer of NSIA Insurance Limited, Ebelechukwu Nwachukwu, said insurance all over the world remains a risk-mitigating mechanism, and called on Nigerians to see what damages the COVID-19 pandemic had done to businesses, human lives, and economies generally and embrace insurance.
Nwachukwu explained that the impact of COVID-19 had created deeper awareness for insurance adoption, noting that it had made most people, who hitherto regarded insurance as a “shady business” to accept the importance of risk coverage.
He expressed optimism that with everyone now knowing the damages, situations like the pandemic could cause, more people would likely embrace insurance post-COVID-19.
To increase industry penetration in the sector, many underwriters have introduced products that could help Nigerians. For instance, Law Union and Rock Insurance initiated the High Net-Worth Individual (HNI) product – LUR Hynet, which caters to the unique needs of these clients such as exclusivity, confidentiality, and flexibility.
According to the organisation, many times, this category of people who have more than one house, usually don’t remember to ensure the one they do not live in.
Commenting, the Executive Director, Law Union and Rock, Supo Sogelola, told The Guardian that the initiatives were borne out of the need to redefine the narrative on insurance and to educate Nigerians on its importance.
Sogelola described the product as unique and comprehensive and helps protect the insured from risks that were not previously covered. For example, should there be a fire in one of the other houses they own that is uninsured; the client would suffer greatly from this event.
“The product covers all forms of general insurance risks a client may encounter or may be exposed to. This includes motor, home, personal accident, and travel insurance. The product is designed to cater to not just the needs of the insured, but also that of the family, domestic staff, and physical assets. This means that the insured can cover his insurance needs and that of his family, his driver, cook, gateman, as well as cover other buildings he owns.
He disclosed that the product could also take into consideration new projects being constructed by offering Construction All Risk policy and Public Liability cover, noting that these are the many possibilities the client can enjoy when they purchase the LUR Hynet product.