Insurance, Good Life and Life After Retirement

As the economy bites harder with many players in the insurance sector positioning to rescue individuals and corporate bodies, Raheem Akingbolu writes that the time for Nigerians to imbibe the culture of being insured is now.
 
“Want a Good Life? Then Get Insured for Life!” is one maxim that has almost become an overkill by promoters of insurance brands globally but unfortunately, only few take it seriously. Yes, life, a powerful four-letter word that embodies reality and learning, hopes and dreams, success and failures. Like a canvas, everyman paints their stories by their actions and decisions. In some instance, people are handed lemons, while some make lemonades, others battle with the sour taste.
A recently popular phase, Life happened or Nigeria happened, holds an almost foreboding or negative meaning. The big question is: how does one avoid or deal with life’s issues or happenings, when and if they occur? Is insurance the way to go?
According to some analysts, Nigerians will be better off if the culture and practice of purchasing insurance is adopted by the majority of the population than they would be in other parts of the world where almost everything is assumed or taken for granted. This is as a result of the immeasurable benefits it provides. Kunle Ajayi, Rotimi Igbasanmi, and Chinedu Dubem (not real names) are individuals at different stages of life who share a genuineness in terms of life’s experiences, career trajectories, post-career blues, et cetera.
The trio are bankers working in three of the new generation banks with a cumulative 55-year experience in the banking industry. But the 2009 consolidation of the Nigerian banking sector by the then governor of the Central Bank of Nigeria (CBN), Prof. Charles Chukwuma Soludo, literally undid them. Ajayi and co. were among the hundreds of thousands of workers who suffered the fallout of the banking policy of that era. Unfortunately, as they say in local parlance, life happened to them! A chapter of accidents literally opened in their lives as a result of the banking consolidation exercise, as the trio not only lost their means of livelihood but also their dignity and humanity.
As breadwinners of their respective homes, hitherto called the shots, they could no longer maintain the kind of lifestyles they were used to.
But that is not the story. The sad and worrisome part is that these men had no reasonable savings, proper economic backup plans, retirement plans, insurance cover, nor anything else to fall back on in order to tide things over on evil days. So, with nothing to serve as a buffer, the odds were clearly stacked against them.
Fast-forward just barely two years after their job loss, the trio were not just shadows of their former selves but were living in severe and dehumanizing conditions that belied their old lifestyles.
Left with very limited options, one of them relocated to the village as a result of a debilitating ailment; another lost his marriage as his wife deserted him when he could no longer fend for the family; and the luckiest of the trio, if you may, managed to secure a job as a security guard in one factory in Lagos.
If the trio’s experience is bad enough, the story of a renowned transporter, who fell by the assassins’ bullet on Sunday, January 8, 2008, though bad in itself, had a happy ending and a momentous ring to it.
Lamentably, he met his untimely death, a bad enough experience for any family to bear, but he didn’t leave his family in disarray.
According to available information, he had a full life insurance policy with one of the major insurance companies, of which his family members became the main beneficiaries following his demise. The family received hefty claims, or what could be described as a huge inheritance, enough for them to live life with limited concerns.
 
Informed sources close to the deceased said at the last count, the family members had since gotten their lives back on an even keel, despite losing their sole breadwinner. The kids, who are all grown up now, have wonderful careers, and are living their dreams literally, such that even the patriarch of the family would be a happy man. Indeed, his case mirrors one of many possibilities for what people stand to gain from an insurance policy.
 
 
Insurance as an untapped goldmine…
It is a known fact that the Nigerian insurance market presents vast opportunities for citizens, the industry, the financial services sector, and the economy. However, the market holds deep cultural bias mitigating against mass adoption, and a major trust deficit based on sharp, practices. As experts say, the net effect is that it does not grow and makes no meaningful contribution to the macro-economic indicators.
Joseph Inokotong, a financial analyst, while commenting on the challenges and prospects in the industry, stated that the Nigerian insurance market, like that of so many other countries around the world, has a long way to go in serving the needs of the people. He was, however, quick to admit that the contribution of insurance to economic growth is potentially significant for this market.
“Insurance is of great importance to a modern society, and in fact, economic growth is characterized by the soundness of a nation’s insurance market. Insurance promotes financial stability and reduces anxiety; it can substitute for government security programs; facilitate trade and commerce; mobilize savings; enable risk to be managed more efficiently; mitigate loss; and foster a more efficient capital allocation,” Inokotong said.
 According to the latest report of the Nigeria Bureau of Statistics (NBS), the contributions of finance and insurance to real GDP totalled 5.35 percent in Q1 2023, higher than the contribution of 4.51 percent recorded in Q1 2022 by 0.84 percent points and higher than 3.95 percent recorded in Q4 2022 by 1.40 percent points.
Interestingly, Agusto and Co., Nigeria’s foremost credit rating agency, revealed in its 2022 insurance report that the gross premium income (GPI) stands at over N520 trillion, thus placing the country 62nd globally. With a GDP of $443 billion as of 2020 and a population of 210 million, Nigeria is easily the largest economy in Africa. Yet, the insurance penetration rate is lower than one percent. This is the problem. Take car insurance, for instance. The Nigeria Insurance Association (NIA) January 2022 report indicates that only 3.4 million out of a total of 12 million registered vehicles are insured.
 Also, less than five percent of Nigerians have health insurance of any sort. The real challenge, therefore, is how to get more people to sign up for insurance.
At one of the insurance forums in Lagos, the Chairman of Mutual Benefit Assurance, Dr. Akin Ogunbiyi, said that 96 percent of Nigerians have no insurance cover and that less than 5 percent of the entire population of Nigeria has one form of insurance cover or another. This includes life insurance cover, which in other countries is fast becoming part of compulsory insurance.
At the National Insurance Commission (NAICOM) Micro Insurance Learning and Knowledge Workshop, held in Abuja, the former NAICOM Head of Strategy, Babajide Oniwinde, said that although insurance penetration in Nigeria was low, compulsory insurance policies would change people’s perceptions. He mentioned the compulsory insurances as Motor Third Party, Builders Liability, Healthcare Professional Liability, Group Life, and Occupiers Liability Insurance.
 Former Chairman of Nigeria Insurers Association (NIA) and former Managing Director of Leadway Assurance, Mr. Oye Hassan-Odukhale, while addressing the media on insurance patronage by the masses and insurance penetration, challenged Nigerian insurance managers on the need to improve the level of insurance penetration in Nigeria by selling insurance products to a larger number of Nigerians in different parts of the country.
 
Managing Director of Risk Guard Africa and Technical Adviser to NAICOM on the Market Development and Restructuring Initiative (MDRI), Chief Yemi Soladoye, said at the current low stage of insurance spread in Nigeria, the regulators would have to recognize the non-tradition operators at least as distribution channels if it truly wants to provide access to microinsurance in Nigeria.
In his assessment of the industry, the Commissioner for Insurance, Mr. Sunday Olorundare Thomas, said the industry has been recording positive ground shifting. He further revealed that the insurance market indeed remained profitable during the year, recording an overall industry average of 56.9 percent and maintaining a relative position of 57.7 percent in the corresponding period of the preceding year.
The non-life segment loss ratio stood at 43.6 percent, while the life business stood at 68.8 percent, depicting a less profitable scenario comparatively over the same period. Consequently, the industry recorded an expansion to about N2.3 trillion in assets at the end of the first half of 2022, growing at a rate of 12.0 percent YoY.
Giving a further breakdown of the statistics, Thomas revealed that out of the total gross premium income, the non-life segment maintained its primacy at 59.3 percent.
“Motor insurance stood third at 14.8 percent, while Marine & Aviation, Gen. Accident, and Miscellaneous reported a share of 12.3 percent, 10.9 percent, and 8.9 percent, respectively. Life business, on the other hand, recorded 40.6 percent of the insurance market production as its share contribution gradually closed up. The share of annuities in the life insurance business stood at about 24.7 percent, while individual life held a major driver position at 41.8 percent of the premium generated during the period.
 
 “For the fourth quarter, the Commission said the gross premium figure in the fourth quarter of 2022 represents a growth proportion of about 36 percent quarter on quarter and indeed, about 18 percent (17.8 percent) year on year, adding that this was a remarkable situation compared to the real growth of 3.5 percent of gross domestic product (GDP) over the same period and could be attributable to consistent regulatory measures being carried out by the Commission,” he said.
 
Enter Sanlam Nigeria…
At a time when many Nigerians are in dire need of a lifeline in view of the biting economic crunch, one insurance company that has positioned itself as the brother’s keeper is Sanlam Nigeria, consisting of Sanlam Life Insurance Nigeria Limited, a limited liability company licensed to transact life insurance business in Nigeria, while its subsidiary, Sanlam General Insurance Nigeria Limited, undertakes general insurance business in Nigeria.
While giving a plausible account of its pedigree, the managing director and CEO of Sanlam Life Insurance Nigeria Limited, Tunde Mimiko, said that with over 100 years of experience in the insurance business under its belt, the company has come a long way.
“We are 100% owned by the Sanlam Group, a leading diversified pan-African financial services group established in 1918 as a life insurance company. Sanlam has evolved into the largest non-banking financial services group in Africa through its diversification strategy. With a story of growth, development, empowerment, and stability, the Sanlam Group is a multinational organization with a significant presence across 33 countries in Africa, as well as in the USA, Malaysia, Australia, the UK, and India,” Mimiko said matter-of-factly.
“Sanlam,” Mimiko reiterated, “considers family a top priority, which is why for the company it is all about the family. We know how important looking after your family is to you. That’s why, as experts in risk management, we insure your life and the money you earn with care and respect. We also stay true to our promises; you can always trust that we will do what we say we’ll do. So, even if something should happen, you can be assured that we’ll do everything we can to ensure you, your family, and your future are properly looked after, no matter what.”
Drawing from the knowledge, experience, and technical expertise of the Sanlam Group, the company hopes to play a pivotal role in the development of the insurance industry in Nigeria, he stressed.
“To achieve this, we are anchoring our operations on product innovation, efficient service delivery, and prompt claim settlement,” Mimiko concluded.
As a company that walks its talk, the mode of operation adopted by Sanlam Nigeria is such that everything literally runs on autopilot. “At the end of the financial year ended 2022, Sanlam Nigeria had paid a total of N22.6 billion in claims. Our bouquet of services emphasizes flexibility, innovation, and simplicity of terms, all in a bid to make everyone feel at home,” said Mimiko, who exhibited a level of certainty about the fact that Sanlam Nigeria’s offering is akin to giving Nigerians a chance at living confidently in a manner of speaking.