Lives are irreplaceable, losses are irredeemable however relief comes for mourners and victims when there may have been some thinking that we ought to protect ourselves against times like this. The purpose of insurance has always been to make us resilient and ready to start over.
Unfortunately, in a situation where the greater population does not know and efforts to bring the knowledge to them remain low, most of those that have been affected by the loss of loved ones, destruction of properties, damage to businesses, loss of jobs, and lost opportunities for income generation would not be ready to start over until help arrives.
The few that would have had insurance policies covering the losses and damage of the last few days of violent attacks on physical assets will need to ascertain that they have valid contracts given the circumstance of riots. They will need to be what insurers call Riots, Strike and Civil Commotion (RSCC) extension on the insurance policies for your vehicles and properties to be able to earn the discussion for probable compensations
It has been tough to explain this to affected individuals and business owners over the last 48 hours but thankfully, it has not been the case with those who had Life policies; just to say, none of the lives lost so far have been reported to have had individual life policies.
Insurance works and ensures that people and businesses that are affected by unfortunate situations like these protests get compensated yet only those who had policies (contracts) can access the benefits of insurance.
This is and continues to be, our understanding of insurance, however, the protests further exposed some of the challenges that conventional insurance face besides low awareness and poor knowledge amongst the citizenry. Perceivably strong reservations to engage the public, poor marketing communications, absence of customer experience reportage, and slow adoption of digital solutions are the factors that continue to stare Nigerian insurers in the face while discussing strategies to deepen insurance penetration and expand insurance density in Nigeria.
Peaceful Protesters Alternative Insurance
Following the updates as the protests by the youths gained momentum in the last two weeks, it was easy to observe that they had put in place an effective response management approach to address unexpected occurrences like injuries and arrests by their medical and legal teams respectively across the country. Damage to phones, vehicles, and other personal effects was also managed by business owners amongst them with the necessary expertise. Not forgetting that they were receiving financial support that enabled them to pay for such services as the need arose.
Why did they not consider taking insurance contracts to protect themselves and their assets during the protests? Did they know and just ignored insurance or did they imagine that those risks were not insurable or are there no youths in the insurance industry that could have seized the opportunity to contribute by offering their products and services?
Or are we to believe that the peaceful protesters had the risks covered and did not need insurance?
As we know, insurance is a mechanism where the risks we cannot handle are transferred to another party that charges us a fee (premium) for providing compensation when a loss or damage occurs. So, it does seem the youths had no need to transfer their risks to insurance companies and that should bother our insurers!
If the young protesters that constitute 54 percent of Nigeria’s population and emerging economic drivers through their dominance of the informal sector of our economy successfully define alternative ways of managing their risks without conventional insurance, there should be more serious efforts at addressing these as threats to the survival and future of the insurance industry in Nigeria.
Firstly, there should be a more deliberate Human Resources (HR) strategy to inject youths into the C-level of insurance companies towards developing an attraction of the enterprises and businesses led by young Nigerians. Considering that every employee is legally protected by both the Group Life Insurance and Pension Scheme of their employers, it should not be challenging anymore to discuss insurance when salaries and other entitlements are on the agenda.
Today, the average age for CEOs in the insurance industry in Nigeria is 53 and even more for Board Members, so it is most unlikely that the Millennials and Gen Z will abort the alternative route they have created to secure themselves to buy insurance from companies led by people they can hardly have access to or connect with. Quite sadly, some reported experiences arising from poor handling of claims have already made them consider carrying on without insurance, except where the law compels them.
Secondly, encouraging the corporate business segment that accounts for over 80 percent of the industry’s Gross Written Premium on annual basis has become even more imperative. During this COVID-19 pandemic season coupled with the protests that turned violent, organizations have had to migrate to digital platforms and scheduled work calendars amongst other remedial measures to meet customers’ expectations with the hope of remaining profitable. Insurers are expected to provide cover against cyber risks and this might be the fastest-growing income earner for the insurance industry. Now, are the insurance companies in Nigeria investing in the infrastructure that enables the capacity to insure against cybercrimes?
This is also the aspect that you have lots of youths doing their businesses and they will be keen to have insurance solutions to these risks.
Communicating the Value of Insurance
While it is necessary to exercise the utmost care in the content and medium that insurance companies use to communicate with the market, it is still important to understand why the communication made by them does not specifically express what their customers (policyholders) expect or receive.
The gap between what the policyholders are told when they are buying insurance policies and when claims occur and need to be settled remains very wide and holds most of the challenges that conventional insurance bears.
Some of the factors responsible for the huge gap are the poor knowledge of the agents and salespersons, limited access to information in a digitized format, and infrequent flow of the information and data. Policyholders do not read their insurance policies because they are in archaic language and unfriendly format yet insurance companies insist on their technical jargon in the documents that will make claims settlement difficult.
Most people move around with the understanding that insurance companies deny or delay claims yet the latter have not deliberately worked on changing that narrative by educating existing and potential policyholders on their action steps to claims settlement.
If you have had your claims denied unjustly, it is important to know that you can get regulatory attention, which process is currently undergoing review, towards increased efficiency.
The protests have surely brought many diverse learning points for the insurance industry and with good identification of the actions needed, quite a lot can be done to bring the youths into the insurance industry with great expectation that communication will be easier than create the path for necessary collaboration.
An insurance industry that will provide a significant level of security for Nigerians especially the youths before, during, and after protests, is desirable and we can work to recreate it.
About The Author
Ekerete Olawoye Gam-Ikon, MNIM, CPP, is a management consultant with a specialization in Strategy and Insurance.
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