Using insurance as tool to take Nigerians out of poverty
Financial inclusion, particularly at the grassroots, has been described as a veritable tool for bringing people out of poverty. It will ensure that factors that make them vulnerable to risks are taken care of through proper risk management.
The former Vice-Chancellor, Enugu State University, Anike Okechukwu, at the Education Seminar of the Chartered Insurance Institute of Nigeria (CIIN), said at the root of poverty lies the deprivation of people’s access to basic necessities such as food, shelter healthcare, education, security and assets.
To solve these issues there must be concerted efforts toward financial inclusion for all citizens, he said.
Okechukwu noted that financial exclusion is a burden that must be lifted, and requires adequate financial planning through insurance policy acceptance.
According to him, the strategic importance of financial inclusion as a catalyst for economic growth and development has been well documented, and this explains why it is now widely considered as the right of all citizens to social inclusion, the better quality of life, and a tool for strengthening the economic capacity and capabilities of the poor.
He said: “If insurance awareness is taken up, the stability in providing quality education is guaranteed even in the event of the death of parents and guardians.
“Housing or property insurance is fundamental in ensuring that a great majority of Nigerians have access to affordable shelter and protection against natural or man-made disasters. Effectively, if one is covered by housing insurance, it will ensure easy access to funds in any event. As you know, many families are homeless today because they are financially-excluded.”
Speaking at the Panel Session, titled: “Insurtech in Africa – Leapfrogging Inclusivity via Technology,” the Chief Digital Officer, AXA Mansard Insurance, Bayo Adesanya, said: “A number of factors have affected the access rate of insurance in Nigeria, such as cultural factors, lack of awareness, and the lack of trust in insurance companies.
“There is a need for insurance products to therefore be – simple, understandable, accessible and affordable, valuable and efficient in order to drive their penetration in Nigeria,” he said.
Adesanya stressed that insurance must be made accessible to the under-served population. “There is a need to actively sensitize and educate the mass market on the benefits and value proposition of insurance. We need to leverage more partnerships with institutions such as telcos, banks, and e-commerce sites to drive performance and distribution.”
He said AXAMansard is committed to customers, especially when it comes to delivering customer-friendly solutions while leveraging on technology.
The session moderator, and Board member/Head of Africa, at the Africa Fintech Network (AFN), Andrew de Kock, said: “We had a lively and engaging discussion among some experienced industry professionals which demonstrated a diversity of views! What is clear is that traditional approaches simply don’t work – how else do we explain insurance penetration of less than 2%? To succeed in the future, a significant shift is required towards more inclusive, digitally accessible products and services.
“The insurance industry has a responsibility to help build resilience among the most vulnerable in society.
The need for speed and simplicity in the mass retail market remains out of focus for the conventional insurer, as over 70 million cannot afford conventional products.”
De Kock noted that this segment understands that there are risks, and are aware of the implications, but have not been properly educated to make use of insurance for risks management.
He, therefore, suggested that to attract these people, there must be products which are simpler and more flexible, not just smaller.
“Partnerships with players that have a large number of customers trust and embracing processes and IT enables a frictionless experience at low cost,” he concluded.
Earlier in his welcome address, speech, former President, Chartered Insurance Institute of Nigeria (CIIN) and the Managing Director/Chief Executive Officer, Consolidated Hallmark Insurance Eddie Efekoha, said the seminar theme: “Financial Inclusion and Insurance – Issues, Challenges and Opportunities,” was specially selected to throw further light on the importance of inclusion, the roles of emerging markets, and the need for creativity in the offering of services by stakeholders to move the needle and grow the insurance industry.