• Sunday, July 21, 2024
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Winter is coming, get insured or pay the price

Winter is coming, get insured or pay the price

In G.R.R. Martins’ award-winning novel “The Game of Thrones” Winter is coming refers to an inevitable season when harvests are short and misery befalls those that are unprepared.


Mark Musa, 69, sat on a wheel chair in front of his house as the sun shone while the cool breeze stung his eyes that made him squint.


Whenever he stared into space, another great shudder rankles his body, as he remembered the mistakes he had made in the past.


When Musa was young, he owed a very big farmland that was passed onto him by his father.


On several occasions’ insurance had been sold him one time or the other but he declined because he felt he was in control of his own destiny.


“I was a successful farmer and l made a lot of money, but l wasn’t paying attention to insurance. A lot of times l was advised to insure by properties but l refused because l never thought any misfortune would befall me. Moreover, tradition shuns against indemnifying one’s estate or life,” said Musa.


Musa was involved in a ghastly motor accident that left him hospitalized and incapacitated, and his children were withdrawn from school to help on the farm so that they raised money for their father’s treatment.


Musa is one out of millions of Nigerians who, out of ignorance and procrastination do not have one form of cover or the other, which is one of the reasons the country’s insurance penetration is one of the lowest in the world.

Nigeria’s penetration rate of stood at 0.31 percent, that compares with South Africa with a penetration rate of 14.7 percent, Kenya with a rate of 2.8 percent, Ghana with a rate of 1.1 percent and Egypt with a penetration rate of 0.6 percent.


When compared to other jurisdiction the Nigerian insurance industry is relatively small and ranked 162nd in the world with a total premium volume of $1.64 billion, according to a recent data by NSE.


According to the NSE, the total Nigerian Insurance market accounted for 0.20 percent of the global premium in 2018.


The industry is beset with a myriad of challenges such as apathy toward insurance on the back of religious belief, poor regulation, and a stuttering economy.


Expert say the major problem with the industry is that most insurance companies are based in the city, pursuing corporate and government accounts without consideration for people in the rural areas.

Read also: Reps begin audit of insurance premium by MDAs

That means there are a lot of people, especially in the rural areas, are financially excluded from the pool, but the regulator has been formulating policies to ensure that these products get to the grassroots.


People in the rural areas are predominately farmers who do not have formal education, and they require special packages.


“Matching of insurance products to the need of the unreached remains a critical factor as most companies still sell conventional products instead of new products, said Pius Agboola, Director, Authorisation and Policy, National Insurance Commission (NAICOM),


“Even in cases where the products are available, there are limited distribution channels to ensure the products get to the consumers. “Apart from the recently-introduced Bancassurance, the sales force of insurance,” said Agbola.


Analysts say farmers need something attractive to convince them to pay premiums, and if insurance companies come up with adequate policies acceptable to farmers, they would buy into insurance policies.


To ensure that famers and other players in agriculture value chain are protected from loss due to flood and other catastrophe, some insurers have decided to provide farmers with the desired products that will help mitigate risk.


To this end, there is the need for risk mitigation mechanism to ensure that farmers and other players in agricultural value chain don’t run at a loss, whenever an insured risk occurs.


Linkage Assurance, Leadway Assurance, IGI Plc, AIICO Insurance Plc, Royal Exchange Plc, Prestige Assurance PLC, among others, are now offering Agric products in a bid to insure risk in both animal and plant farming.


Musa will spend the rest of days on a wheelchair, but he is preaching to those who care to listen to him that taking a cover when they are young is a way to secure a future.