• Thursday, March 28, 2024
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How financial inclusion through insurance can help take people out of poverty

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Financial inclusion, particularly at the grass-root, has been described as a veritable tool to bring people out of poverty, by ensuring that those factors that make them vulnerable to risks are taken care of through proper risk management.

Read Also:  Is Nigeria’s extreme poverty population, bank charges a threat to financial inclusion?

Anike Okechukwu, vice-chancellor, Enugu State University in his presentation at the 2019 Education Seminar of the Chartered Insurance Institute of Nigeria (CIIN) held in Enugu, said at the root of poverty lies the deprivation of people’s access to basic necessities such as food, shelter healthcare, education, security and assets, and to solve these issues there must be concerted efforts toward financial inclusion for all citizens.

Okechukwu noted that financial exclusion is a burden that must be lifted, and which requires adequate financial planning through insurance.

According to him, the strategic importance of financial inclusion as a catalyst for economic growth and development has been well documented, and this explains why it is today widely considered as the right of all citizens to social inclusion, better quality of life and a tool for strengthening the economic capacity and capabilities of the poor.

“Appropriate financial services can help vulnerable households reduce risk, build resilience, smoothen consumption, safeguard savings, better manage the consequences of unforeseen events, and invest in assets and grow businesses. To achieve this, insurance remains strategic.”

Okechukwu also noted that increased health insurance can ensure adequate healthcare for many families and reduce out-of-pocket expenditure. In fact, health insurance is linked to economic growth, and reduction in poverty.

“Nigeria is battling with a number of scaring health issues including malaria, tuberculosis and infant and maternal mortality, all of which have a sweeping impact on productivity. Insurance services can make a significant difference in the lives of vulnerable individuals by helping households mitigate shocks and improve the management of expenses related to unforeseen events such as medical emergencies and a death in the family, he noted.

Another critical area that insurance could cover he noted is education, stating that this could ensure that parents and guardians save up enough money to ensure stability in the education of their wards.

“If education insurance is taken up, the stability in providing quality education is guaranteed even in the event of the death of parents and guardians.”

“Housing or property insurance is fundamental in ensuring that a great majority of Nigerians have access to affordable shelter and protection against natural or man-made disasters. Effectively, if one is covered by housing insurance, it will ensure easy access to funds in any event. As you know, many families are homeless today because they are financially excluded.”

Alfred Egbai of AXA Mansard speaking on  ‘ Financial Inclusion and Insurance: The need for Speed and Simplicity’ said the mass retail market remains out of focus for the conventional insurer, as over 70 million cannot afford conventional products.

He noted that this segment understands that there are risks and are aware of the implications, but have not been properly educated to make use of insurance for risks management.

Egbai suggested that to attract these people, there must be products which are simpler and more flexible, not just smaller.

Partnerships with players that have a large number of customers trust and embracing processes and IT enables a frictionless experience at low cost”.

Eddie Efekoha in his earlier welcome speech said, the Seminar Theme: “Financial Inclusion and Insurance – Issues, Challenges and Opportunities” has been specially selected to throw further light on the importance of inclusion, the roles of emerging markets and need for creativity in the offering of services by insurance stakeholders in order move the needle and grow the insurance industry.

According to him, it is common knowledge that insurance penetration is nowhere near where it should be in the country. As practitioners, we can also acknowledge that companies are doing all that they can within the tenets of the law to reach out to customers in order to create a sustained demand for insurance products.

“The question is, are our best efforts enough? What more can we do to improve our lot? 

Efekoha said the seminar theme beams a spotlight on financial inclusion as a major facilitator of the growth of the insurance industry.

“Even the smallest molecule of our operations should be clear and concise to our target audience and our messages should reach them where ever they are. Only then can we truly retain top of mind awareness and agree that we have taken a significant step in what we collectively desire to achieve, an Insurance industry that is a significant contributor in terms of numbers to the economic growth.”

 “As risk managers, it is our lot to increase the tempo of our campaigns for insurance awareness and professionalism in order to get more people to stand up and take notice and for more Nigerians to embrace insurance as a profession and as a service offering.”

Efekoha said the CIIN will continue to leverage on all platforms to ensure the propagation of insurance education, awareness and the highest levels of professionalism obtainable in the industry.

Chidi Okoro, a customer relations expert in his presentation emphasized the need for insurance companies to be flexible and innovative in their product offering.

“Creativity will unlock the opportunity, access and engagement are key drivers to deepening penetration, he said.