Some experts who spoke to Newsmen on how Nigerians can leverage insurance policies to avoid hopelessness, helplessness and joblessness after devastated incidents have expressed divergent opinions.
While some respondents have reasons why they were shying away from taking insurance policy, some expressed their trust and confidence in insurance companies considering the benefits thereof.
A financial expert in Lokoja, Kogi, Mr James Madu told the News Agency of Nigeria in an interview that lack of trust remained the main factor contributing to why most Nigerians were reluctant in taking up insurance policies.
Madu said that historical experiences of the people with unreliable insurance providers have led to skepticism about the insurance policy.
He, however, added that limited financial resources could also hinder the people from enrollment in insurance.
According to him, some people will prefer to prioritise basic needs over insurance premiums amidst the present economic hardships in the country.
“Low financial literacy due to limited understanding of insurance benefits and complexities, as well as cultural and religious beliefs could also serve as factors.
“Most Nigerians rely on faith or traditional support systems
“Poor customer service and unpleasant experiences with insurance companies, and Inefficient regulatory frameworks and enforcement could also hinder Nigerians from subscribing to insurance premiums,” Madu said.
He, however, called for Improvement in public awareness campaigns, enhanced financial literacy programs, as well as strengthening regulatory frameworks, to increase insurance uptake.
Also speaking, a business woman, Mrs Joyce Akande, attributed low insurance uptake by Nigerians to economic instability and hardships due to inflation, currency fluctuations, and economic uncertainty.
“Lack of awareness and limited knowledge of available insurance products and benefits can also serve as a reason for low insurance uptake by the people,” Akande said.
Mr Peter Emeka l-Onujeme,
Managing Director, Peelinks Electroworld Ltd, Lokoja, thumbed up insurance policy following a fire incident that razed down his Mall on Sept 25, 2020.
Emeka l-Onujeme said that it was Anchor insurance company that came to his rescue after the sad incident.
“Initially for me, like any other Nigerian, I didn’t like anything about insurance before my sad incident.
“In short, I had that insurance cover on my burnt Shopping Mall by accident.
“I took a facility from Fidelity Bank and used the Mall as a collateral. This is because you must have collateral before the bank can deal with you.
“I wasn’t the one that invited the insurance company to come because I was skeptical about them like any other Nigerian. I had heard about them refusing to pay claims so I wasn’t keen on dealing with them.
“But because I do a lot of business with banks, I must insure my properties before I’m qualified to access a facility from the banks.
“So when the incident happened, we triggered the insurance clause with Anchor Insurance company. They came around and did the assessment of what was destroyed by the fire incident.
“Unlike the Nigerian thing, in less than three months, I was paid over 90 per cent of my claims by Anchor Insurance, which was the merchant insurance company to fidelity bank as at 2020.
“It was shocking to me. It was to me like a movie. I have read it in books and watched it in movies but I saw it happening to me real like a movie considering the record time and the percentage I was paid by Anchor Insurance. I will never forget them.
“Since then I did more evangelisation and have brought in about 30 persons into the insurance policy. In fact, wherever I go, I tell people to insure.
“You can insure your slippers and anything you can insure. We are basically traders in the informal sector, so we need to encourage one another to insure our properties.
“It’s unfortunate most people are not keen on this insurance policy, we just want to buy our goods without insuring them with the belief that nothing will happen to them.
“I have to tell others that without an insurance policy, I would have been running Okada service. Thank God the insurance companies are doing a lot in terms of enlightenment campaigns, especially nowadays.
“People know about this insurance policy, but they are being over-spiritual with everything. They will say, ” I know nothing will happen to me with God on my side.
“We are spiritual and not practical. Practical people. They will say, it’s not my portion, my Pastor has decreed and so nothing bad will happen to me and so on.
“Nobody believes it can happen to him or her. Even me, I didn’t believe it could happen to me. But when it happened, within a few minutes I was nearly reduced to zero by the fire incident .
The managing director advised Nigerians to embrace insurance policy to help them overcome some shocks in their lives.
The Special Adviser to Kogi Governor on State Emergency Management Agency (SEMA), Mrs Sandra Musa, urged Nigerians to embrace Insurance policies and products to ameliorate unexpected disasters that could befall anyone.
Musa appealed to Nigerians to imbibe the culture of taking stakes in insurance to address pains of their exposure to risks.
She listed some important areas of insurance where citizens can invest, to include; Life Insurance, motor vehicle insurance, property insurance and general insurance, among others.
She condemned the the poor attitude of most Nigerians to policies relating to insurance
“Nigerians must be encouraged to insure their properties, in case of general insurance, and their dependants, in case of life, so that when the need arises, they will have something to fall back on.
“One of the least things an average Nigerian of today thinks about, is risk occurrence, not to talk of making plans on risk amelioration, through insurance.
“Governments at all levels, Should come up with legislations, or effective insurance schemes that would make it compulsory for citizens to take up such policies, while also paying attention to enforcement of existing laws.
“This, I believe, will help the government and the people, protect human and material assets, as well as grow the insurance industry.” Musa said.
Also, Mr Taiye Alabi, Gov. Usman Ododo’s Lawyer, said Nigerians were known for deep religious faith, hence they mostly don’t believe in insurance policies.
Alabi said that the devotion of the people to religion influences their decisions which also includes those related to insurance and financial planning of Nigerians.
“In spite of my belief in God and religion, faith is commendable, but it does not provide immediate protection against property damage.
”Hence the reason why humans should not shy away from insurance, though insurance is a financial investment it has been proven to be a valuable Safety net as life itself is very unpredictable.
“Knowledge of the future is limited, decision-making is inherently risky. With insurance you can confidently mitigate potential losses. While religious faith provides spiritual security, insurance offers a tangible protection against financial hardship. Alabi said.
In his contribution, Mr Joe Gabriel, a former banker, now business man described insurance as a risk-transfer mechanism for an affordable fee,
Gabriel noted that public perception of slow claim settlements by insurance companies, stands as one major factor hindering insurance uptake in Nigeria.
He said in 2003, the National Assembly enacted the Insurance Act 2003, introducing new regulations and requiring increased capital bases for insurance companies.
“Unlike before, allot of reforms has happened to insurance companies which over rules publics perception of the slow claims settlements by insurance companies.
“Many Nigerians prioritize immediate needs and spending over long-term financial planning, including insurance.
“This approach can be attributed to several factors. One reason might be a limited savings culture, often due to low income. As a result, Nigerians often rely on faith to cope with unforeseen circumstances.
“However, the rise of financial inclusion initiatives is changing the landscape. Retail and micro-insurance products are now becoming more accessible to Nigerians in the informal sector and those with limited income.
“These products offer similar benefits to traditional insurance plans but are tailored to their specific needs and budgets,” he said.
He added: “Ignorance is also another greater barrier. When people lack knowledge, it can be difficult to internalize a concept and take action based on it and this challenge is common in the Nigerian public’s perception of insurance.
“Many Nigerians, despite experiencing losses, struggle to understand the benefits of insurance.
“Knowledge of insurance goes beyond basic concepts. Many Nigerians lack awareness of specific products that could address their unique needs.
While in Niger, residents of the state say Nigerians shy away from taking insurance policy as a result of lack of trust and confidence because they see some insurance companies as scams.
The residents added that many Nigerians have the fear of non-payment of claims by insurance companies when they are affected by natural disasters.
Mr Benjamin Ladalo, a resident of Minna, said that among the factors that made Nigerians shy away from taking insurance policy was limited understanding of insurance benefits.
He said there was a need for more awareness creation and education in order to address the low awareness of insurance options and benefits.
“Many of the insurance companies do not compensate people with the full amount of damages incurred after natural disasters.
“Many Nigerians shy away from taking insurance because of complexity of insurance policies, lack of transparency by insurance companies and delay in payment of claims,” he said.
He said that to address these concerns, there was a need for insurance companies to be more transparent, create more awareness,. simplify their policies and processes to boost confidence.
Ladalo added that through this, Nigerians can develop trust and confidence in insurance companies and embrace insurance as a vital risk management tool.
Similarly, in Niger, Mr Paul Ojonugwa, a Chartered Accountant, identified poverty, ignorance and lack of trust as some of the reasons Nigerians shy away from taking up insurance policies.
Ojonugwa said that the insurance penetration in the country was still low and needed improvement given the many benefits in the case of disaster.
He stated that many Nigerians were overwhelmed with daily basic needs and might not even think of insurance and not to talk of premium payment.
“A lot of Nigerians have little understanding of insurance benefits and the complexities around it, hence their unwillingness to take up policies.
“There is a need for increased awareness about insurance policies and the inherent benefits for the people,” he said.
He also said that historical experiences with insurance companies, such as delayed or denied claims had eroded trust in some Nigerians and urged insurance companies to improve in their services.
Ojonugwa also mentioned that lack of access to insurance services was responsible for low insurance penetration, especially in rural areas in the country.
He maintained that some Nigerians rely on family, community, or faith-based support systems instead of insurance.
He added that others rely on informal savings, cooperatives, or other coping mechanisms in risk management.
Ojonugwa, therefore, said that in order to increase insurance adoption, providers should focus on building trust through transparent claims settlement.
He also stressed the need for increased awareness on insurance benefits, provisions of affordable and tailored products, as well as improving accessibility through digital channels.
Ojonugwa pointed out that the National Insurance Commission (NAICOM), and insurance companies were working to address the challenges and increase insurance penetration in Nigeria.
Corroborating Ojonugwa’s position, some residents of Lafia, expressed their views on insurance policies adoption.
Mr Micheal Kuje, a farmer, said that he had heard about insurance but needed better clarification particularly on claim payment before he could venture into it.
“This is something that involves money and one has to be careful in making decisions,” he said.
Amina Aliyu, a petty trader said she doesn’t know how insurance works, adding that she prefers investing her money in their local ban, where she was assured of benefits.
