Features Write-Ups

LAGOS AND THE REVIVAL OF INSURANCE  – Toyosi Ogunrinde

It was adequate insurance arrangements that helped the Lagos State Government underwrite losses incurred during the #EndSARS protest in October last year.

Hence, strict adherence to insurance policy really helped Lagos with the challenges of replacement, reinstatement and repairs of damaged public assets in the aftermath of the protest. 

COVID-19 is another challenge that was catered for by the insurance industry. The consortium of underwriters provided a ‘special package’ for the state’s medical personnel involved in the treatment of patients. This was done in the form of Corporate Social Responsibility (CSR).

The foregoing was revealed by Lagos State Commissioner for Finance, Dr. Rabiu Olowo, as the state celebrated the maiden Lagos State Civil Service Insurance Week with the theme, “If You Can Be Insured: We’ll Bear Your Risk”.

According to Olowo, the programme was organized in partnership with over 120 insurance brokers to underscore the importance of insurance, educate the populace about the government’s huge commitment to insure its workforce.

This, he said, became necessary, following that if everyone was personally insured, it would no doubt relieve the government of the unwanted burden of insurance claims. 

The Commissioner said during unforeseen disasters the burden falls on the government to pay compensation to the affected victims, which should have ordinarily been taken care of by the insurance companies.

The resources at the disposal of the government can thus be channelled towards more meaningful projects instead of paying compensations that ordinarily could have been undertaken by insurance companies. 

Olowo, thus, opined that embracing an appropriate insurance policy is one of the prudent decisions that anyone can make because different forms of unfortunate incidents happen that cannot be controlled.

The Commissioner maintained that Lagos is forward-thinking and particular about the safety of its workforce and, therefore, insures them against any unforeseen occurrences, just as it pays benefits of deceased employees.

He revealed that the intention of the government, as well as that of its partners, to raise the level of awareness on the importance of insurance will be achieved even beyond the expected threshold.

In addition to raising public awareness about insurance, he stated that the process of accessing insurance claims by the government employees will soon become less cumbersome.

In the bid to encourage individuals and organisations to embrace insurance by making it a way of life, Olowo revealed that the government spends a huge sum of money annually to insure its properties and workforce. 

This, the Commissioner said, shows the government is leading by example and setting the pace as far as insurance is concerned.

Universally, life is full of intrinsic dangers. No doubt, the ENDSARS violence is a typical example of such. Hence, insurance can be a useful strategy to protect businesses financially from such unplanned losses. 

It is, thus, logical for companies to have business insurance to cushion the effects of a sudden calamity. With the level of destruction occasioned across the country, as a result of varied violence, many affected uninsured businesses might find it extremely difficult to survive. 

But as earlier emphasised, business liability insurance could help curtail threats such that the business could gradually pick up and eventually stabilise. This, of course, is the beauty of insurance.

It is, however, important to stress that individuals could also go for life insurance cover which guarantees payment of a death benefit to named beneficiaries when the insured dies. It is a form of fortification that helps keep loved ones financially afloat in the event of sudden death of the benefactor.

When a company makes losses, the insurance company could rescue it, provided an insurance policy is in place. This, naturally, promotes business continuity. When an insurance policy is in place, the policy holder can immediately approach the insurance firm in case of any experience of an insurable loss. 

With the proper business insurance, business proprietors can achieve peace of mind and focus their attention on attaining a fruitful, cost-effective, and personally gratifying business.

Similarly, for individuals and organisations, it is wise to take up a property insurance policy. In a broad term, this provides either property protection coverage or liability coverage for property owners. 

Property insurance provides financial reimbursement to the owner or renter of a structure and its contents in case there is damage or theft-and to a person other than the owner or renter if the person is injured on the property. 

Today, buying an insurance policy has become imperative in view of growing global uncertainties. With a variety of insurance products ranging from pension (which is the most popular amongst workers), health insurance, life insurance, vehicle insurance (which contains third party clauses depending on agreement), and business/company insurance amongst others, there is a wide range of options for organisations and individuals to choose from

Newly introduced to insurance products is the clause of strike, riot, and civil commotion clauses which used to be offered for free, but are now being charged. However, the products need to be re-evaluated to cover pandemic. The best aspect of an insurance policy is that it offers financial cushion to the policyholders, with the benefit outweighing the cost.

In our society, the level of awareness toward insurance is quite low. According to recent data, roughly 20% of educated Nigerians understand the importance of insurance, not to mention the uneducated ones. The people’s apathy to insurance is caused by cultural constraints, religious beliefs, low per capita income and low insurance/financial literacy affects the economy adversely.

The truth about insurance is that buying insurance products by individuals or businesses have multiplier effects. It doesn’t benefit them only: it trickles down to the expansion of insurance companies, which implies increased employment opportunities for youths -working as agents and getting commission, or as financial experts and insurance consultants- and increased revenue sources for the government as the companies pay taxes out of the profit they make.

Therefore, beyond providing soccour for people in times of unanticipated misfortune, the insurance industry, if properly structured, could become another flourishing sector that holds the key to wealth creation, employment and prosperity. 

In the interest of its broad economic and other benefits, governments at all levels, organisations and other stakeholders need to join hands with the Lagos state government to usher in an enduring revival in the country’s insurance sector.

Ogunrinde is of the Features Unit, Ministry of Information & Strategy, Alausa, Ikeja.

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