Belief systems inhibiting insurance penetration

Insurance penetration in Nigeria currently stands at 0.3 per cent. In other words, assuming we are 200 million people, only six million have any form of insurance and most of them are holders of the mandatory Motor (Third Party) Insurance. This puts Nigeria at about 34th position in Africa and 11th in West Africa! Even Sierra Leone, The Gambia and Benin Republic are ahead of us in terms of insurance penetration.

Weak purchasing power and lack of awareness have often been blamed for the low insurance penetration in Nigeria. But the major culprits, in my opinion, are the lack of insurance culture and our belief systems. One, many people still see children as investment. So they have no other plan for their retirement. All they want to do is educate their children so that they can take care of them in old age. No problem there because the bible even urges Christians to take care of their parents, especially in old age. There is probably a similar injunction in the Quran.

Where you have the problem is that parents are usually not the priority of their adult children. This is how a typical grown-up child plans, on getting out of school: get a job, then accommodation and settle down; stabilize a little financially and get married. Once they start a family, they have upkeep expenses, medical bills, school fees, rents and other bills to contend with. It is a vicious circle and many of them live a chunk of their adulthood or even their entire lives in this rat race. Meanwhile, parents are old, but many of the children either have no financial capacity or are not wired to adequately support aged parents. For some, who are men of means, even pleasure and leisure expenses come ahead of parental support.

That is why every parent is encouraged to prepare for his or her retirement and taking a life insurance policy is part of the preparations. Take up a life policy where you can be making periodic contributions over time within your financial capacity. As your income grows, you can review your sum assured. On maturity, the money will help take care of the assured in retirement or old age. There are many details of life insurance that space will not allow us to go into here. They will form a whole topic for discussion in future. In the meantime you can talk to a registered insurance broker (RIB) for more details and guidance.

Belief in the supernatural also makes many potential insureds to turn their backs on insurance. Somebody acquires a vehicle. He takes it to his pastor or imam to pray over it. Just because his pastor or imam has “decreed” that he will not be involved in an accident and the vehicle will not be stolen, he does not see any need to protect his asset anymore. He simply goes only for a Motor (Third Party) Insurance to take care of third party liabilities. A comprehensive Motor Insurance Policy to take care of theft and own damage becomes superfluous. This is what also happens with assets like landed properties. The scenario also plays out with adherents of African traditional religion and other faiths.

As a Federal Road Safety Commission officer reminded me some time ago, when you are on the road, you contend with not only your vehicle, but at least four others: the ones in front of you and behind you, and the two beside you. This is without prejudice to the motorcycle riders, who are all over you. Some time, you contend even with the third vehicle behind or in front of you. Sometime ago, there was a multiple accident. A commercial bus descending a bridge at high speed suddenly realized there was traffic build up at the foot of the bridge. The brakes failed and the bus rammed into the saloon car in front. The saloon car flew off the ground and rammed into the vehicle in front and the sequence continued till the fifth vehicle.  So, without doubting the efficacy of the prayers of your pastor or imam, elders, etc., you still need to protect your assets. Heaven helps those who help themselves, the saying goes.

Insurance is meant to take care of fortuitous events, but when people rely on fortune tellers to tell them about the future, they believe that takes away the uncertainty. So somebody, who does not believe there is any uncertainty, has no need for insurance, or so he thinks. But virtually all adherents of all religions believe there is only one Supreme Being who is omnipotent. So your fortune teller is painfully limited in foretelling the future. You need insurance.

Many Christians also believe that misfortune, bereavement and tragedy are not their portion.

And I ask, is there any human being who will not be bereaved at some point? We all have parents, parents-in-law, uncles, aunts, children and other relatives. The only way you will never be bereaved is to die before all these people. Let us face reality; bereavement, misfortune and tragedies are part of humanity.

We should plan and prepare for them to lessen the effect when they occur and insurance is one of the modern ways of preparing for these fortuitous events.

Quit your utopian disposition and face reality. Put all forms of cultural inhibitions away and talk to a registered insurance broker to help you plan in the event of a fortuitous occurrence. There are specific insurances within the insurance spectrum – insurance of person, property, liability and rights and financial interest – to meet your specific needs.