•They’re misled by ‘hearsay’ –Experts
By Henry Uche [email protected]
Trust and confidence about insurance business in Nigeria has remained a perennial problem. Researches conducted over time show that a significant number of Nigerians do not believe in the ability of insurance companies to pay out benefits when the need arises. For this reason, insurance penetration has remained very low (at less than one percent), lowest in Sub- Saharan Africa.
However, operators in the industry, analysts, sector watchers, the media and many other stakeholders, have made efforts to sensitise people towards the benefits of insurance and its inevitability for business survival.
Just recently, at the fire incident in Dosunmu street, Balogun market in Lagos, some shop owners shared their experiences regarding insurance as they counted their losses.
One of the victims, Mr. Jonathan Umeh, who trades in textiles told Daily Sun that he lost two of his shops in the fire. Umeh who says his business is worth millions, revealed that an insurance company (name withheld) refused to insure him and his associates against fire incidents because of the way the market was structured but regretted not approaching another insurance company for possible cover.
Speaking with a another shop owner, Mr. Abiodun Alani, who sells lightings for interior decoration and tailoring materials, told Daily Sun that he has traded in the market for many years and when asked if he had insurance, he said, “No, because we don’t really believe in them. If you relate with insurance companies for a while, when an such incident happens and you call them, they would start telling a different story. But if we see a reliable and a trusty insurance company that would do what we agreed, then, why not, we can engage them.”
Other aggrieved victims who spoke to Daily Sun said: “The truth is that we don’t even know which one is which. We intend to buy insurance cover but they are not truthful. I have not approached any of them, but I have friends who have insurance policies but they complain bitterly against the insurance companies over unfair treatment.”
Responding to the issues raised by the traders, the Deputy General Manager, Corporate Communications and Investor Relations at Sovereign Trust Insurance Plc, Mr. Segun Bankole, said that those traders or any other persons could have been denied the insurance policy if they were not going to abide by the requirements set out by the insurance company.
According to him, fire policy could be very precarious if one does not carry out the underwriting painstakingly. He noted that there are certain things they (prospective policyholders) need to put in place for such a cover to be incepted.
On issue of trust, Bankole said, “It is the same thing they have been hammering on when they want to shy away from taking up insurance policy. Those who still have trust and believe in insurance will continue to do insurance, while the ‘doubting Thomases’ will continue to lick their wounds when the eventuality happens.”
The insurance expert maintained that, if the traders were educated enough, they would have been seeing the amount of money paid on claims -industry wide, year- in-year out. He stated that the recent fire incident should be an eye-opener that insurance still remains a pivotal factor for the sustenance of wealth creation. “Re-stocking their shops and putting the buildings back will definitely cost a fortune, which would have been borne by the insurance companies that they lack trust in. Some of them even go as far as saying, ‘they cover their shops in the blood of Jesus’ since they pay tithes in their places of worship. That’s how bad it is,” he said.
President of the governing body, Risk Managers Society of Nigeria (RIMSON), Mr. Gus Wiggle, told Daily Sun that many people rely on hearsay in judging insurance companies.
Wiggle who was a former chairman of Nigerian Insurance Association (NIA), said a majority of people who are averse to insurance have not had any hand first experience with any insurance company.
“Most people who run away from insurance have never had any interaction with insurance companies. So it’s about perception, and that is where insurance companies need to do more to work on the psyche of the public,” he said.
On the refusal to insure against fire at the aforementioned market, Mr. Wiggle confirmed that it would be true under certain circumstances. But for any insurance company to give cover, they must have done their risk assessment and if it falls below par, it would be difficult.
For instance, the insurance expert said, “The traders would need to have a fire extinguisher, fire fighting equipment, risk improvement etc, and in most cases, it’s almost impossible to keep to these recommendations, because the buildings are usually too tight, they lack ventilation, the wiring was not well done, so the risk evaluation would be very difficult.
“Insurance companies should flaunt their experiences especially when they do marvelously to victims of mishap. Let the world know when they paid claims. For anyone out there, until it happens, then you will know the need for insurance.”