Some dos and don’ts of insurance and how it applies to elections

According to a recent survey by NOIPolls 9 out 10 Nigerians don’t have any form of insurance. Among those that have 63 percent have vehicle/car insurance, 20 percent have life insurance, 17 percent have property insurance, 16 percent have health insurance and 16 percent have fire, burglary and travel insurance.

Nigerians are not insured against the most vulnerable risks: life, health and agriculture. Death and ill-health, the top two risks with an economic impact, are also the most widely experienced according to a 2012 survey by Enhancing Financial Inclusion & Access (EFInA). In a country where a significant number are employed as farmers a bad harvest, theft of agriculture produce or destruction by fire, storm or flood can be ruinous. 

The NOIPolls survey concludes that poor enlightenment is the reason why Nigerians don’t buy insurance. Industry experts say the problem is trust. The EFInA survey revealed that most Nigerians don’t know where the closest insurance company, broker or agent is located and that users of insurance have the highest level of dissatisfaction with providers of financial services. 

Dos and dont’s 

People buy insurance to secure the future but what they pay for, what they get in return, is a future intangible promise.  How can buyers safeguard their interests, what do they need to know when buying insurance? 

A meticulous assessment of needs is required: what are you buying protection against, what insurance coverage best suits this? How much should you invest? Will the life insurance maintain your living standard or cover your financial burdens or those of your loved ones?  

Thorough assessment of your financial ability is necessary. Life insurance is a long term commitment. Compare products. Examine the policy carefully i.e. think of the unintended consequences of the policy.  

The premium amount is not all there is to insurance. Leave nothing to chance: the devil is in the details. Scrutinise information in the pamphlet. When renewing consider the pros and cons of a new policy; don’t rely on insurance brokers, check policy details and inquire about the insurance company. 

Nigerians low uptake of insurance is somewhat similar to our politics (imagine politicians as brokers or agents trying to sell you an insurance policy). There is distrust because most over promise and under deliver and you’re stuck with them for four years. Therefore it’s right to be wary of politicians peddling policies. It’s appropriate that voters compare political contenders, the consequences of their proposed policies, scrutinise their manifesto or roadmap, if they have one, before voting out or re-electing an incumbent. This assumes that voters take time to match their preferences to politicians.

Buyer beware 

Even if more Nigerians paid attention to who they vote for they must realise politicians don’t think like they do. Moreover, our apathy to insuring vulnerable risks like health and life suggests we won’t spend as much time on a less threatening issue such as electing the next governor of our state. 

Voters, generally, don’t put as much time and attention into political decisions as they do for economic ones. One vote won’t influence or change much but once the car is bought economic impact is clear. In voting, the choice is among two or more candidates. In buying the choice is about how much. 

Besides, politicians don’t look beyond the next elections. Politicians’ priority is getting elected or re-elected. Their time horizon is four years and their policies are those that will, hopefully, generate dividends within the period. Anything beyond that, no matter how beneficial it may be, is irrelevant.   

Actually Nigerians, at least a small but growing number, have found alternative ways to insure against ill-health: regular check-ups, a healthy lifestyle and medical tourism to India. This is a good sign. 

Vote buying declined in the US and the UK when the number of poor and vulnerable people among the electorate reduced and the middle class increased.  Poor, illiterate voters were a boon for politicians who bought their votes in cash or with essential commodities. Also as the electorate and districts grew bigger and more populous funding the political machine and monitoring the brokers who had close contacts with the voters cost a lot. Party leaders started bypassing rent-seeking brokers whose local knowledge came at premium when they found they could appeal directly to voters without risks to their seats and party’s prospects. 

Nigeria is young and rapidly urbanising. As at 2013the median age of Nigeria’s 167 million population was 17.5 years and 49.6 percent resided in urban areas like Lagos, Abuja, Kano, Ibadan and Kaduna. Over 60 percent of its population were under 25 and 30 percent are aged between 25 and 45 years. There are the majority among the wired generation. Nigeria has 66 million Facebook users, 1.8 million Twitter users and 1.3 million users on LinkedIn. Of the 127m active mobile connections one-quarter own smart phones. The number of educated, professional, aspirational young voters who are critical of government is rising.  

This demographic, actively engaged, more online than offline, was in the forefront of issues such as the removal of petrol subsidy. They are debating why an unconstitutional kerosene subsidy that gulped $4.43 billion has brought no relief for those it was intended for. They want to know why it’s difficult to buy land in Lagos. 

They wonder why the oil and gas sector, the supposed goose that lays the golden eggs, has stalled and want to know why monies are appropriated for the turnaround maintenance of refineries and yet Nigeria’s import of refined products has almost equalled the amount of crude oil we used to export to the US. 

Meanwhile, politicians at the state and federal level are dusting up their campaign promises and policies. For instance, the federal government has launched air-conditioned rail cars and brand new Irizar buses with SURE-P emblazoned on them which are already hitting the road. Funds for the Second Niger Bridge were released lately.  

Politicians are going to spend the next few months trying to show concrete evidence of their policies and promises. There will be more “enlightenment campaigns” to win the trust of voters and convince them that they are not quacks. Voters on their part would do well to apply some of the dos and don’ts of buying insurance before voting: the defining issue of the next elections must be which political party (insurance policy) can secure the physical, social and economic security of all Nigerians.  

Tayo Fagbule