Deepening insurance penetration in Nigeria requires both short term and long term measures. On the long term, we need to start creating insurance awareness among young people. It is with this in mind that the Lagos Area Committee (LAC) of the Nigerian Council of Registered Insurance Brokers, as part of its corporate social responsibility, went to Methodist Girls High School, Yaba, Lagos. Our mission was to preach the gospel of insurance and win young converts to the noble profession.
The lecturer for the day was Mrs. Olufunke Adenusi, a past chairman of LAC and, incidentally, an old girl of the school. She spoke on “Insurance as an Excellent Profession.” She started by informing the students of the necessity for insurance. She gave example of collapsed buildings, fire incidents and loss of bread winners. Adenusi could not run away from the professional definitions of insurance as “a means of protection from financial loss…a contract between an individual and the insurance company wherein an individual gets compensation against the losses from an insurance company.” But she had to come to the students’ level with an example of mutual contribution by the students into a common purse from where those who suffer losses are compensated.
Insurance stands on six pillars called principles of insurance: Utmost Good Faith, Insurable Interest, Proximate Cause, Indemnity, Subrogation and Contribution. The professional definitions of these principles, especially Proximate Cause, are quite technical. But Adenusi was talking to a young audience and had to navigate the “landmines.” For Utmost Good Faith, she simply told them that when getting insurance, you have to tell the whole truth and nothing but the truth. Proximate Cause was simply what caused the incident. For Insurable Interest, you can only insure something where you stand to lose if it is lost or damaged. Indemnity means getting compensation for only what you have lost, all things being equal. Subrogation is the right of your insurance company to get compensation from the other party who caused the accident or loss after the insurance company has paid your claim. Finally, contribution is when two or more insurance companies that insured the same asset share the loss, so that the policy holder will get indemnity, but not make profit from the loss. Mrs. Adenusi went further to divide insurance into the two traditional classes – life and non-life. During the question and answer sessions later, some of the students showed a good grasp of basic insurance. One student wanted to know the value to place on life. Of course, life insurances are not policies of indemnity because you cannot place value on life. The sum assured a policy holder chooses in life insurance is determined by his financial capacity to pay the required premium over time.
She also used the opportunity to intimate the young minds on compulsory insurances in Nigeria: They include Group Life Insurance, Motor (Third Party) Insurance, and Insurance of Public Buildings. Others are Employers Liability Insurance, Builders Liability Insurance and Health Professionals Liability Insurance. We have treated all these compulsory insurances in this column in the past, so we shall not go into details.
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Then Adenusi went on to the crux of the discussion, why insurance is an excellent profession. First, insurance brings peace of mind. As the current chairman of LAC, Mrs. Bukola Ifemade explained in her opening remarks, a truly wealthy person is one with insurance. If you have assets in billions and they are not protected, you will be back to square one if they are lost or damaged. In addition, insurance, whether life or non-life, takes care of the wellbeing of people.
Adenusi wrapped up the presentation by telling the students the role of insurance brokers in the insurance value chain. The insurance brokers undertake risk evaluation and assessment, they advise policy holders on their rights and obligations under an insurance policy as well as the types of policies. Insurance brokers also render personalized insurance services and consultancy to the insuring public. They also advise clients on the insurance companies to patronize based on certain parameters like strengths and expertise. Also, insurance brokers help to process the claims of clients and ensure the claims are promptly paid. Insurance also helps clients to periodically review their insurance portfolio among other roles.
Earlier in her remarks, the vice principal of the school, Mrs. A. O. Alli, had told the executives of the LAC that the school was offering insurance as subject at a time, but had to stop because of the high failure rate in WAEC examination. The LAC promised to team up with the school to facilitate the re-introduction of insurance. From the question and answer session, anchored by the LAC vice chairman, Rotimi Olukorede, it was obvious from the enthusiasm of the students that reintroduction of insurance is an idea whose time has come.
The students’ enthusiasm increased during an oral mock test on insurance anchored by the LAC Treasurer, Femi Oduwole. The students had fun while learning and many of them are now eagerly looking forward to studying insurance in the university. The vice principal, Mrs. Alli, also promised to encourage her children and wards to study insurance and actuarial science, following her participation in the session.
Another take away from the session is that the future of insurance in Nigeria is bright, but individuals and groups need to be engaged on the benefits of insurance. Then the industry needs to work harder on making insurance affordable and accessible to the mass of the people. Also, the industry needs to work continuously on simplifying the processes and be proactive to take advantage of emerging trends.
Other insurance Brokers in the delegation were two past chairmen of LAC, Mr. Ayo Akande and Mr. Segun Kafaru, Asst. Secretary, Mrs. Bukola Aiyeola; Financial Secretary, Mr. Yemi Faturoti, PRO, Mr. Godwin Onyeke and Mr. Francis Ewherido.
OWERRI AIRPORT FIRE
Owerri Airport Terminal Building, Imo State, went up in smoke last Monday. Portions of the building were damaged. Insurance of public buildings, as we said above, is one of the six compulsory insurances. Is there insurance in place to take care of the fire damage and third party liabilities?
Finance October 27, 2020