Experts advise Nigerians to embrace insurance to hedge recession

As the economic recession bites hard, with a decline in purchasing power and subsequent adjustment in consumption patterns of most Nigerian households, insurance experts have advised that this is the best time to take up insurance policies for protection against losses.

Insurance, they affirm, offers great buffers which enable people replace loss assets on the back of the payment of little sums as premium, rather than dipping into their declining family resources, or going a borrowing.

The experts who expressed concerns over the rising cost of goods due to rising inflation and shortage of FX say it is cheaper to pay for insurance, either for protection of assets or family, than spending money for replacement when losses arise.

Barineka Thompson, director, Inspectorate, National Insurance Commission (NAICOM) said “this is the time to embrace insurance because what you will ordinarily close your eyes and redeem will no longer be easy.

“So, you need insurance as a buffer so that you have a fall back in the event of a loss, Barineka said.

He further observed that the premium for insurance is small and that people should approach insurance companies for advice on the different products available for protection as  well as investment.

“When you buy insurance, you transfer the cost of a potential loss to the insurance company in exchange for a fee, known as the premium. Insurance is there to provide protection for you, your investment and your business,”

Sunday Thomas, director-general, Nigerian Insurers Association (NIA) said the public should as matter of importance secure their belongings during this period of recession with insurance, which remains the best tool to mitigate risks.

Thomas stated that insurance companies have products to cater for risks faced by individuals on a daily basis, stressing that the industry would continue to educate the public to ensure they understand the importance of insurance.

 “The best way to go now is to keep what you have. You have a building why not insure it so that should anything happen, you can continue to have a house. You have a car, why not insure it to make sure that should anything happen to it and you could not buy a new car, the one you have can be sustained.

“You have children in school, take insurance so that if anything happens to you, their education would not be hampered. There are various policies for all of these. And that is the way to go. In times of recession, Insurance is the last hope,” he said.

Dotun Owolabi, an insurance broker said disaster could take any form; car theft, property fire, accident or sickness that could lead to major distractions.

“Insurance gives you peace of mind and you know that if anything happens to you, your family or your business, that you will be financially secure.”

Folusho Alliyu, chief technical officer, Great Nigeria Insurance  (GNI) plc observed that this is the time Nigerians need to consciously educate themselves on the benefits they are bound to derive in taking up an insurance policy.

According to Alliyu, there are various insurance products that have been designed to protect lives and properties. He further observed that it is essential for the insuring public to willingly open their minds in accepting the fact that insurance is a very important aspect of their lives.

“Nigerians are taking too long to recognise and accept the reality that without insurance, one is like building a house without a foundation and in no time, it could come crashing down; and when that happens, you will have to start from the scratch again, with even more funds than you initially expended,” he stated.

Alliyu said insurance gives the insured the promise of a safe and comfortable future. “The earlier we disabuse our minds of the old notion that insurance does not work, the better it will be for all of us, he said.”