The popularly held notion is that insurance is for the high ups or the upper class in the society. This view is rife in Nigeria, compounding the acceptance challenge faced by the insurance industry in the country, where poverty rate has remained astronomically high, like many developing or underdeveloped economies.

BBC recent reports show that Nigerian living in poverty rise to nearly 61% with almost 100 million people living on less than a US Dollar or less than a British Pound a day, an amount that is not sufficient to feed a dog a day in either of the two societies.

An individual is termed poor if he or she cannot afford the bare essentials of life and has low earning capabilities.
In spite of the sustained public awareness moves by the industry, through its regulatory bodies such as the Nigerian Insurers Association (NIA), the Nigerian Council of Registered Insurance Brokers (NCRIB) and the Chartered Insurance Institute of Nigeria (CIIN), the spread of insurance in Nigeria has continued to have met brick walls in the country for multitude of reasons, part of which is poor belief system. Most recently, the National Insurance Commission, which is the industry’s regulatory institution, mooted the Market Development and Restructuring Initiatives (MDRI) to enhance financial inclusion and catalyze insurance growth.

The MDRI which comes with an awareness bouquet, including Takaful and Micro Insurance, is aimed at ensuring better acceptance of insurance, particularly by the lowly in the society.

Takaful and Micro Insurance are significantly borrowed from growing economies of the Asian Tigers, notably Indonesia, Malaysia, India, Singapore, etcetera, where they thrive greatly and contribute a chunk of those nation’s Gross Domestic Product.

But against the popular notion that insurance is not for the poor are evolving arguments that insurance is actually more needed by the poor, to make life meaningful for them. The reason is that the poor, being enfeebled by limited opportunities have low recovery capability in the event of material or human loss when they indeed occur.

There is no argument that presents this scenario better than a tale that was recently told of two personalities who suffered some degree of losses and how they both coped with the aftermath. One was an affluent business man and industrialist with an octopus of net worth friends while the other was a cab driver who makes ends meet through his only Toyota car with which proceeds he feeds his family of five.

It happened that one day the businessman was waylaid by a group of bandits who disposed him of his sleek state of the art car at gun point while on his way to a prestigious club in town to rollick the evening.

On managing his way to the club after the incident, his friends gathered to sympathize with him and shortly afterwards, they made plans on how to replace the car without him getting involved.

He was quite delighted and life went on as if nothing had happened! Conversely, the poor cab driver woke up to the shock of his life to discover that his only means of survival (the old modeled 1997 Toyota Carina car) had been carted away in the middle of the night.

It was as if the heavens were collapsing on him as there was no one to turn to. To further compound his vicissitudes, there was a backlog of loans he had to pay back to the cooperative society from where he secured facilities to buy the car.

He contemplated suicide! Only if he had insured the car appropriately, most assuredly he would at least have been returned to the position he was before the loss. But this was not to be.

It could be seen that even without insuring his car, the rich fellow had recovery capability through his chains of friends, while the poor man had none.

This is a food for thought.
Insurance is more to be considered by the poor. Like a slogan states “whatever is worth having is definitely worth insuring..!”

It should be pointed out that to maximize insurance benefits; the insurance client could utilize the services of professional intermediaries often referred to as insurance brokers.

Being professionally equipped with versatile knowledge about the insurance market, they are closer to clients and could render personalized advisory services to them, irrespective of their class or social status.

They also could help them to pursue their claims when a loss does occur.

Tope Adaramola
Assistant Executive Secretary, NCRIB


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