The Nigerian hip-hop singer, David Adeleke also known as Davido, in his hit song in 2018, promised Chioma his lover ‘assurance’.
What exactly does this mean? An assurance is a protection against something that will definitely happen such as death. On the other hand, insurance is a protection against something that is probabilistic in nature (i.e it may or may not happen), for example car accident.
The insurance we now know originated from “the practice of preventing a great loss for any one individual by the acceptance of a small loss by all members of a group” 900 years before Christ, on the island of Rhodes. At first, the only losses they focused on were the value of ships and cargoes, but with time, the crews’ lives were also included. When investigated, insurance is noticed to have contributed greatly to the development of most contemporary rich countries.
The value of insurance contracts in America as at 1926 was $79bn (81% of GDP) at a time when the population of the country was not up to 120 million. Considering the fact that life insurance was similar to savings, more money became available for people to start up businesses and for small businesses to expand. Also, there was an increase in public health since it was in the interest of insurance companies to make sure their life insurance policy holders live as long as possible, so they began to enlighten the people on how to stay healthy and avoid diseases by sharing pamphlets.
In Nigeria, the Insurance Act of 2003 and other legislation made 7 types of insurance compulsory. They are; life, employers liability,building construction, occupiers liability, motor third party, aviation third party and health care professionals liability. Yet, very few people in Nigeria have taken up insurance. If we compare the current Nigeria with America as at 1900, we will find out that insurance is almost entirely missing from Nigeria. According to PwC report in 2015, adults with insurance in Nigeria were less than 2% (whereas almost 100% of adults in America had insurance in 1915) and insurance contribution to GDP is less than 1%.
Since the option of making insurance compulsory by law to Nigerians wasn’t enough to make Nigerians embrace insurance, the Insurers Committee and NAICOM have decided to use a different method called ‘persuasion’ (which is the only option left). They intend to come all out and enlighten the masses on the importance, benefits and roles of insurance in the economy, not forgetting the advancements in made within the sector.
Therefore, they have launched a media campaign with the theme ‘live with freedom’. According to their surveys, 43% of Nigerians were totally ignorant of insurance, and yet a lot of Nigerians are suffering from or have suffered from events like sickness, accidents, etc which can be insured against, thereby reducing the overall poverty rate in the country.
Insurance was perceived as gambling when it first started in the Europe but with time that stigma was overcome. Some Nigerians believe that insurance companies won’t settle their policy holders when they make claims, but figured have shown that claims paid have overtime increased from N87bn in 2014 to N148bn in 2017.
Unfortunate events can affect anyone and everyone but insurance is a sure solution to help us overcome these unfortunate events.
Everyone is advised to insure their baby if like Davido they love their baby and want her to know that they’ll be with her through thick and thin.