Thank heavens, the past few weeks’ intensity has been unprecedented and totally unbearable for me, it’s been so intense that I’ve not been able to update this blog. I’m so sorry for that but in the long absence; I’ve learnt all lot from the school of hard knocks called life…that’s a story for another day.
I’ve found something amazing in the past few weeks…No, it’s not that Mr. President’s not very bright; everybody had that figured out ages ago. Super eagles failing to qualify for the Nation’s cup for the first time in 25 years is not it either; that’s hardly surprising considering the kind of commitment being a Nigerian inspires these days. It’s what will it take to make something decent work in Nigeria. That is the golden question. What does it take to make any decent plan work in any nation? Vision, motivation, commitment, determination, persistence, focus, we can go on and on about these qualities but do we have trust?
Why don’t we or can’t we trust in the system? I did a little research and came up with an interesting finding.
- Insurance thrives better in a nation with a huge population.
The rationale behind this aggregate opinion is that in such large population the sector is able to set premium from different angles to build its pool of funds from the residents of such country.
Out of this pool of funds, insurers are able to settle claims that occur, as it is not all insured policies that suffer loses. Also, life funds are used to provide long term funds for key economic and development projects in the country.
According to statistics by African Insurers Organization, the table below shows the percentage of insurance penetration of some countries on the continent.
| COUNTRY | % PENETRATION |
| South Africa | 13.2 |
| Namibia | 8.4 |
| Morocco | 2.9 |
| Ghana | 1.6 |
| Senegal | 1.4 |
| Cameroon | 1.1 |
| Nigeria | 0.7 |
In the table it is observed that Nigeria came in last and that is a pointer to the sad that our economy is behind nations like Namibia and Senegal, nations without a drop of crude oil and are still turning out better economic pointers/indicators than ours. Why should this be?
The reason cited for our very low insurance penetration in Nigeria is
- Local insurance companies often concentrate on underwriting corporate businesses giving little attention to the development of individual life policies.
In 2010, life policies accounted for just 16% of the total premiums paid in Nigeria. A mere 16%! People would give an arm and a leg to protect their businesses or property but would not consider putting some amount on the life responsible for building the business or property in the first place. Does it make any sense for anyone to safeguard property and not the owner of the property? Is it not laughable that the premium paid on insuring property doesn’t yield any return on investment if there is no claim while that of life can make a return in the form of policy termination, policy maturity or compensation? And many people are still against that same life insurance policy that can help them put something aside for financial security purposes.
So what is the problem? Why is life insurance penetration so low in our society?
Besides the state of the economy which we shall examine later, the recurring decimal when marketing insurance is the issue of trust.
Nigerians have little or no faith in our financial system.
- Crumbling or even dead banks pretending to be sound.
- Bank directors helping themselves to depositors’ funds.
- A Central Bank with anti-small business tendencies and policies.
Our litany of woes seems to be endless but it all starts and ends with trust. Bankers and insurers alike have abused the trust of depositors and investors but my question is…don’t they have trust issues abroad? From Bernard Madoff to Jerome Kerviel to Allen Stanford to Kweku Adoboli to the numerous the Ponzi schemes, none of them took place in Nigeria nor have Nigerian ties. You would be surprised the results you’ll see when you google the financial crimes of the world and see that the level of perpetration in Nigeria pales in comparison.
The relevance of life insurance cannot be overstated or over flogged.
- Life insurance is structured to meet different needs ranging from savings to investments, which can earn the policyholder some interest.
- Life insurance policies are designed to proffer solution to individual’s particular needs.
- Insurance is not only about death, it is about planning for your future ensuring that if you are there or not, dependents are taken care of and spared the pain of the extended family mess.
It is important you find someone you can trust and implement a savings plan for you and the immediate future ahead of you.
My name is Ogungbemi Olumide, my numbers 07033588160 and 07056989820 and I’m an Insurance marketer with Standard Alliance Life Assurance Limited, Ikeja, Lagos.
