Old Mutual pushes insurance-backed savings amid economic uncertainties

By Cynthia Ezekwe

Old Mutual Nigeria, a subsidiary of Africa’s financial services powerhouse, Old Mutual Limited (OML), has advised Nigerians on the need to adopt insurance-backed savings plans to build a formidable savings culture amid the economic downturn and uncertainties.

The advice comes amidst reports showing that insurance penetration in the country remains low despite its rising credibility as a means of mobilising savings  and supplying long  term capital  for economic growth and as an asset allocator.

Available data show that just 0.5 percent of small and medium size enterprises (SMEs) in Nigeria have insurance policy, compared with 54 percent globally, per Augusto and Co, in its 2022 insurance industry report.

According to the leading provider of industry research, this low penetration is as a result of inadequate access to information technology, weak regulatory framework, lack of skilled personnel, poor knowledge of insurance service by the prospective assured, and low standard of living.

Old Mutual appears to seek to ride on the back of this data to begin the push to attract attention to insurance-backed savings, especially with information also showing that the concept of savings is an essential component of a business cycle, and a great avenue to meet financial goals.

Insurance-backed savings is one of the best ways to build a formidable savings culture and increase one’s savings, as it gives an access to life insurance coverage, which is bigger than the premium paid.

Savings insurance plans are a type of life insurance that offer the opportunity to build and safeguard funds for the  future, and ensure financial security

To this end, Old Mutual Nigeria has pointed out the need for Nigerians to adopt insurance-backed savings plans, especially at a time when the country is undergoing turbulence in its economic activities, and global socio-economic uncertainties.

Speaking on the necessity of Nigerians to adopt insurance-backed plans, Alero Ladipo, executive head, marketing and customer experience at Old Mutual Limited, noted that the capacity of an individual’s financial planning and security loses its fidelity in the face of continued market volatility, eroding the confidence with which they can predict the future.

“The reality is further complicated by the complexity of global exigencies, making it harder for experts to analyse correctly. These ambiguities and lack of clarity require all to make smarter financial decisions anchored on guaranteed wealth protection no matter what life throws at these trying times,’’ she added.

According to Ladipo, the Old Mutual short term savings plan is a good option for Nigerians who are willing  to save funds and achieve financial goals, as it bears a competitive annual interest rate.  She also noted that the plan provides a life cover of up to N1,000,000 for a N5,000 minimum monthly premium contribution.

“In other words, whilst we help you put away a reservoir fund for the rainy days, we also ensure that your beneficiaries are in pole position to get an agreed compensation should life throw up the unexpected. This product brings peace of mind in these periods of uncertainties and volatilities,’’ she said.

The plan provides flexibility that allows the policyholder to increase or decrease their monthly savings premium and risk cover at the policy anniversary, Ladipo further explained, noting that customers can withdraw up to 50 percent  of their funds only once between six  to eighteen  months and are free to surrender the policy if needed.

As an avenue to ensure that its numerous existing policyholders and prospects access the product conveniently and in real-time anywhere in Nigeria, Ladipo disclosed that Old Mutual Nigeria has revitalised its website and other digital channels, to enable seamless delivery of a hassle-free  customer experience.

In light of the above, Ladipo  affirmed  that the company  will continue to educate Nigerians on the need to adopt insurance-backed savings and equip them with the right information on the role of insurance to the economy.