There is now an urgent need for greater insurance awareness and penetration in Nigeria to manage increasing risks in the system.
The National Vice President of the Association of Registered Insurance Agents of Nigeria (ARIAN) and a Senior Agency Manager at NSIA Insurance Limited, Jegede Olatunji, said this in a recent chat with a cross section of Finance and Business Online Publishers (FiBOP) in Lagos.
He shed light on the crucial role of insurance in managing risks and highlighted its numerous benefits for individuals as well as businesses.
“As insurance awareness grows, efforts are being made to reach out to the informal sector, which is increasingly recognizing the importance of insuring their products and assets” he said.
According to him, Insurance provides individuals and businesses with financial security against potential losses caused by accidents, theft, natural disasters, or health-related issues.
In his words, “It acts as a safety net, ensuring that policyholders are not financially devastated when unforeseen events occur.”
“By transferring risks to insurance companies, individuals and businesses can focus on their core activities and goals. Insurance experts assess and manage risks on their behalf, allowing policyholders to navigate their daily lives and operations with greater confidence.
“For businesses, insurance plays a vital role in ensuring continuity. In the face of major losses or liabilities, insurance coverage provides funds for repair, replacement, or compensation…
“Helping businesses recover and resume operations. This stability safeguards jobs and contributes to the overall economic health of the nation” he added.
Acording to him, this action of Insurance firms offers the individual and businesses peace of mind by reducing uncertainty and anxiety, providing protection against potential risk and allowing policyholders to concentrate on their daily activities without constant worry about financial setbacks.
“Insurance contributes to the stability of the economy by sharing and distributing risks. By preventing the concentration of financial losses on individuals or businesses, insurance companies help maintain economic balance and prevent severe disruptions.”
He also stated that Life assurance provides financial security to individuals and their families in the event of the policyholder’s death. It ensures that dependents are financially supported and can maintain their standard of living after the policyholder’s passing.
“It can facilitate effective estate planning by allowing individuals to allocate funds for inheritance, pay off debts, cover funeral expenses, and provide for future generations and ensuring a smooth transition of wealth and assets.”
Certain life assurance policies Olatunji deaclared offer investment components that allow individuals to accumulate wealth over time. These policies can serve as a retirement planning tool, providing individuals with a source of income during their post-employment years.
“Insurance plays a critical role in managing risks and providing financial security for individuals, businesses, and the overall economy. Its benefits encompass financial protection, risk management, business continuity, peace of mind, and contributing to economic stability.
“Recognizing the importance of insurance, efforts are being made to increase awareness and outreach, particularly to the informal sector.” He noted.
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