Have you been using insurance without getting value from it?

BY EKERETE OLA GAM-IKON 

Ekerete Ola Gam-Ikon, MNIM, CPP, is a Management Consultant in Insurance and Entrepreneurship. He can be reached on +234-802-585-0344 (WhatsApp only) or eolagamikon@gmail.com

Many of us talk about having insurance coverage for years without getting anything. Indeed, this has become part of the public complaints against the insurance industry in Nigeria, where news reports recently had a group demanding that the percentage of premium paid should be refunded by insurance companies. How ridiculous?! Ignorance must be kicked out of insurance in Nigeria!

So, let me attempt to explain how the relationship between YOU and insurance works, and hope it helps answer the question “Have you been using your insurance without getting value from it?”

Insurance is, essentially, a POOL that you subscribe to for protection from the effects of risks against you and your cherished assets. Those with reported damages or losses get compensated from/by the pool (insurance), while others would have contributed to their relief without knowing because insurance companies don’t announce this.

Interestingly, the alternative insurance, Takaful (Islamic) Insurance, offers the opportunity where its Participants (Policyholders) get a share of the surplus made by the company at the end of the financial year. Takaful Insurance is still relatively new in Nigeria but gaining acceptance fast, especially amongst Muslims.

Conventional Insurance has been practised for over 100 years in Nigeria and we are very familiar with its core message of “restoring you to your position before the loss”, when you buy insurance.

That said, we can begin to examine today’s question by stating that USING your insurance and getting VALUE from it are two different things.

Here goes my explanation and hope it helps someone.

Firstly, before you decide to get insured, you would see a risk or risks that you need to protect yourself and/or assets from. So, you proceed to buy the insurance that’ll do the job. For example, your Comprehensive Motor Insurance Policy, which protects your vehicle from the risks of accident, fire, theft as well as riots, anywhere you are in Nigeria and West Africa!

With the Comprehensive Motor Insurance Policy, you are effectively USING the insurance you bought from the day you were issued the Certificate of Insurance, which allows you to be on the road.

You are also USING it when you feel safe, secured and have peace of mind, knowing that if any of the risks crystallises, you’ll be paid by your insurance company!

You are even USING it when you tell others – family, friends and associates that “I have insured it comprehensively”, in case of your vehicle or office. You are distinguished by that simple singular statement, indicating your priceless usage of what you paid for.

Yet, your “Insurance Advantage”, as I now call it, does not stop there but has the hidden VALUE when something goes wrong, that is, when one of those risks – accident, fire, theft in case of Motor Insurance – fall through. You’re poised to get the VALUE from your insurance!

VALUE comes when you expect your insurance company to respond as it had promised, to settle your claims promptly, and it does!

VALUE comes when your insurance company does the payment of the claims faster than you expected. That’s real VALUE!

Again, I’m hoping the explanation here helps someone. 

Just so we all know, whether you’re a policyholder or policyholder-to-be, insurance addresses damages and losses resulting from accidents and incidents!

Let’s stay connected…#InsuranceWorks 

Which comes first, the market or the industry

The answer to the above question may seem obvious to the matured mind but challenging to the one who is growing in his or her career or endeavour, hence the need to appraise it.

Depending on your position, you’re bound to argue that the other will not be there if not for you and the argument goes on.

What’s the point of such an argument anyway?

Insurance, by the story of its origin, was started by sea merchants who had experienced losses and decided to create a pool from where they could compensate any of them that lost merchandise. 

At the time, there were no insurance companies, no reinsurance companies and no regulators, but subsequently, the pool created by the sea merchants became the origin of the insurance industry we have today all over the world. 

This might be the way many other industries began, after all, they’ll first be human beings before groups, associations or organisations.

Today, the insurance industry continues to express the spirit of those sea merchants despite the formal layered structure it has assumed, and other insurance stakeholders recognize the critical position of those first parties!

As a customer-focused business, whatever decisions that are taken by the regulator, reinsurers and insurers must be extremely mindful of those first parties – policyholders (sea merchants, if you like).

So, do you perceive this to be the case? What do you see from your position, not only for the insurance industry but others that you’re involved in?

I’m keen to know, as we need to rest this argument of “if not for me, you’ll not be there”, which comes up when excellent service is desired or demanded.