By Ekerete Ola Gam-Ikon
How do I know? You may ask and I will draw your attention to the many aspects of our lives that have INSURANCE as “their surnames”. Very interesting!
Car, home, phone, mobile, sports, entertainment, infrastructure, credit, agriculture, marine, health, aviation, tourism, bancassurance and life assurance, to mention a few.
These classes of insurance and quite some more are available, accessible and affordable. Insurance is relatively cheaper than other financial services and the benefits of insurance are often not to be compared with others.
Governments, organizations and individuals have various classes of insurance that they can get to keep themselves bouncing back after unexpected and unfortunate accidents and incidents.
Whether it is terrorism, hurricane or cyber attack, the insurance industry is always the effective and reliable tool to manage the recovery. Over time and across the world, the insurance industry has settled claims amounting to several billions of US Dollars due to disasters caused by such risks.
Insurance is meant to work for us and the evidence of such work can be clearly seen in Asia, America and Europe. Flooding, fire, earthquake, windstorm and riots are common risks that affect us and we are able to recover when insurance coverages exist.
Nigeria has been a frontrunner when we consider how many categories and classes of insurance have been made available, through laws, to protect us and enable our businesses thrive.
You can select from any of these categories of licences issued by the insurance regulator, National Insurance Commission (NAICOM):
- Life
- Non-Life (General)
- Microinsurance
- Takaful (Islamic Insurance)
Under Life, there are two distinct classes of insurance namely Whole Life and Term Assurance. To suit the specific needs of customers, several variants of these classes are available and we must always seek to know the difference, so we do not buy the product that gives more commission to the Insurance Agent but leaves us with little understanding until we are asked to pay the next premium in his/her absence or seek to claim.
With the Non-Life (General) category, we have over twenty classes of insurance from Motor to Agric and now Cyber. Several variants of the different classes of insurance under General Business have been developed, sometimes it is difficult not to find the insurance coverage that meets your need in Nigeria.
Microinsurance is designed to ensure low income earners are included in the insurance ecosystem to cater for risks they face. Since it was introduced in Nigeria and the Guidelines released by NAICOM in 2018, it has attracted many active people at the bottom of the pyramid and is set to be the game changer for the insurance industry in Nigeria. You can decide to buy insurance from a Microinsurance company and I assure you there will be one either on your device or in your neighbourhood.
Takaful (Islamic Insurance) is as popular in Asia as conventional insurance is in Africa, and considered as the best alternative to conventional insurance. There are distinct differences in the way they operate when compared with conventional insurance companies.
The contributors (like policyholders) enjoy the surplus distributed after the end of the financial year from the businesses insured. This is one of the alternatives it offers unlike the conventional insurance companies that returns nothing to policyholders after year end.
Please note that until National Health Insurance Scheme (NHIS) now National Health Insurance Authority (NHIA) and National Pensions Commission (PENCOM) were formed, the insurance industry as we know it today was offering Health Insurance and Pensions to both individuals and organizations.
Similarly, what the National Social Insurance Trust Fund (NSITF) operates as Employees Compensation was offered by the insurance industry as Workmen’s Compensation Insurance.
All these classes of insurance, nearly sixty as at last count, are available, accessible and affordable for us to protect ourselves and businesses from financial losses whilst creating wealth.
Many Nigerians have said they do not know about insurance, some have said they do not understand it and need more enlightenment before they buy the coverage required to keep them from losing. However, there is an emerging generation of buyers that have the user mentality and seek to be enlightened and educated about insurance from using it rather than wait.
We face increasing risks daily and recently a study has revealed that cybercrime and climate change are the top risks we need to pay attention to. This has necessitated greater dependence on technology by insurance companies. Even the risk of motor accidents have now been situated in the behaviour of the driver, thanks to Telematics.
Insurance technology (Insurtech) has emerged to ensure insurance works even better for us in sync with other new technologies like Artificial Intelligence and related Data Sciences. Insurance is now predictive and no longer just preventive and reactive as we knew it.
Today, in Nigeria, there are several options introduced by insurtech firms to give us better insurance experiences.
We can consider the “pay-as-you-use” insurance for our vehicles. These insurtech firms have not only made insurance much cheaper, they have also made it addictive with the one called Embedded Insurance, which I will only share with those who ask to know and understand it.
So, all of these categories, classes and patterns of insurance have been allowed and developed to ensure insurance works for us. Are you still waiting to be enlightened?
Share this please to educate others and be assured I will be here to answer your questions and comments.
I remain…
Assuredly Yours,
Ekerete Ola Gam-Ikon
+234-802-585-0344
olagamola@gmail.com
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