Insurance perspectives: What we own and how we protect them

Nigeria is one country where the sense of ownership is deep-rooted in the cultures of its nationalities, and serious considerations are, expectedly, given to the way we identify and manage what we own.

As it is in many countries, the natural resources are, by law, owned by the government, indeed the Federal Government, in the case of Nigeria, while the artificial or processed resources could be owned or held by organisations licensed by the Federal Government of Nigeria. 

We have continued to consider those resources we own as assets and always seek to value them to ascertain our worth from time to time.

Understanding what can be owned and by who and at what value is a very important element of any insurance contract. Your insurers would be keenly interested in knowing who will be affected by the loss of or damage to any asset.

Also, they will want to know who will pay the premiums due on the assets they are required to protect against risks that could cause you financial losses.

The most critical asset of any country or organisation is the people! In other words, YOU! 

Yes, we hear this, and we are quick to agree, but what is the value of the people, or what’s your value? Indeterminable!

So, most of the time, the basis for insuring any person is the remuneration or earnings of the person within the period of insurance, often, annually.

Beyond people (You), let’s quickly examine how this works in different domains. 

• At the federal, state and local government levels, we can identify the assets owned by the government, from investments to infrastructure, and records of them are properly kept and managed from time to time.

The question, however, is: does the government indeed know what it owns, and are the records up-to-date, accurate, and reliable?

From available reports, we know that the assets of the Federal Government of Nigeria held through Ministry of Finance Incorporated (MOFI) would be valued in tens of trillions of naira, when properly updated, and we can expect more premium into the insurance industry and, by implication, greater protection of the assets.

An even more interesting dimension to the greater good of insurance regarding the assets of the Federal Government of Nigeria is the increasing revenue that can be generated from those who utilise those assets without having insurance as required by the law. 

Adequate insurance of the assets owned by the Federal Government of Nigeria as well as states and local governments would be the demonstration of prudent and transparent management of the assets, which make up our commonwealth.

• For privately owned organisations including Non-Government Organisations (NGOs) that are renowned to own assets worth comparably higher values than those of governments at state and local government levels in Nigeria, the records of their assets are relatively more up-to-date, accurate and reliable.

In this digital era, most of these records are “stored in the cloud” and secured by cybersecurity solutions, which often do not guarantee that they cannot be hacked.

When breaches occur and recovery management is required, organisations now rely on cyber insurance, another derivative of insurance, the most tested risk management mechanism for businesses. 

Interestingly, such risk associated with internet usage is not limited to organisations or governments. We all get exposed to cyber attacks.

• As individuals, we often do not bother about keeping records of what we own, especially for religious reasons. Truth is, most of the time, we don’t even think it matters.

Culturally speaking, what we own is either what has been given to us or what we have acquired and held in our names. Even when debt is involved or we are entrusted with it, an asset that we can use for our own purpose would be considered to be ours.

This has been the ignoble basis for which we consider insurance! Why would you insure what is not yours against risks that you can not control?

Elsewhere, many individuals choose to protect their assets through means that they will not expose the ownership details, for example, insurance, which requires that you subscribe to a pool.

Too many vehicles and buildings remain uninsured for this reason, notwithstanding the requirements of the law. 

Individuals have been known to enjoy ‘insurance coverages’ mostly as part of groups or under employment, but once they are retired and on their own, they revert to the belief that insurance is not reliable, simply because they would not reveal details of the owners.

As individuals, organisations, or governments, we can only begin to make insurance work for us by declaring what we own and considering to protect them through the pooling system insurance provides.

In terms of costs, processes, and benefits, we will realise that insurance remains the best, in spite of options and alternatives that have emerged over the years.

Do you own devices that seemingly dictate your daily activities? Do you drive vehicles that give you a sense of achievement? Do you live in houses that give you a reasonable level of comfort? If you know you will become distraught when anything bad happens to any of these, then your best bet is insurance.

Remember, most importantly, that whatever is the worth of what you own, when something goes wrong and there is no insurance to replace or repair it, then your worth will reduce; whereas, if you had insurance coverage when accidents occur, you will receive compensation up to the limit of the value of your insurance in the contract with your insurer.

Insurance companies have become more discerning and better prepared, thanks to digital solutions, to respond when their customers report claims or make complaints. 

We are on to a new season for insurance stakeholders to experience improvements in insurance product offerings and customer service, and your duty is to test the capabilities of insurance operators.

Let’s do this: determine what you own and adopt insurance to protect your worth!

*Editor’s Note: Gam-Ikon sent this piece before his recent appointment as Deputy Commissioner of Insurance (technical operations), National Insurance Commission (NAICOM) by President Bola Tinubu over the weekend

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