By Babatunde Ayedoju

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The word insurance is not one that features in our daily conversation as Nigerians or even in the media space, but it is surely a word that a good number of Nigerians can relate with. Insurance is a global practice and in Nigeria, to be specific, people patronise the available insurance companies to insure their property and lives so that they can be compensated in case any natural or man-made disaster occurs.

Cars, houses, companies, health and even one’s life, among others can be insured. However, the difference is that while it is compulsory to insure one’s car, others are optional. Possibly because there are stiff penalties for failing to insure one’s car, a lot of vehicle owners always ensure that they get an insurance certificate.

Unfortunately, the same thing cannot be said about other insurance options. Apart from vehicle insurance which is compulsory, it has been noted that there is a general apathy for insurance among Nigerians, and that includes insurance of one’s health, despite the fact that people believe health is wealth.

Last month, the Chairman of Healthcare Providers Association of Nigeria (HCPAN), Lagos State branch, Mrs. Biola Paul-Ozieh, decried the low uptake of wellness cover in Nigeria 19 years after the establishment of National Health Insurance Scheme (NHIS) and a year after it was made compulsory by the National Health Insurance Authority (NHIA) in 2022.

Paul-Ozieh who was speaking at the midyear meeting of the association in Lagos tagged “Operationalising the NHIA Act 2022: The Actuaries’ Viewpoint,” lamented that only six percent of Nigerians had enrolled with the NHIA.

This may not come as a result to many. About a month earlier, precisely in May, the Chief Executive Officer, NOI Polls Legal Department, Dr Chike Nwangwu, quoting a survey that was carried out by the organisation, said that only 17 percent of Nigeria’s population has health insurance coverage. Nwangwu made the disclosure in Abuja during the health financing policy dialogue themed “Accelerating the Implementation of the NHIA Act to Improve Health Insurance Coverage in Nigeria” organised by the Nigeria Health Watch in conjunction with the National Health Insurance Authority.

It should be noted that Nigeria’s population currently is about 200 million. Going by this survey, that means only about 34 million out of the over 200 million Nigerians have health insurance coverage.

Meanwhile, in 2021, Dataphyte, an online platform, stated that only three percent of Nigerians at that time were covered by health insurance provided by employee health coverage. While stating that of the three percent 56.7 were male and 43.3 female, the platform added that up till that time access to affordable healthcare remained out of reach for most Nigerians, especially those without formal employment.

Meanwhile, even the vehicle insurance that seems to have a wide coverage in Nigeria is not without its own hiccups, as there are indications that about 8.9 million out of the 12 million vehicles on Nigerian roads have fake insurance policies.

Checks by a Nigerian tabloid indicated that only about 3,013,205 Third Party Motor policies are in force, leaving behind 8,986,795 million motorists plying Nigerian roads with fake, expired, or no insurance papers.

The report stated that in 2022, when Third Party Motor Insurance was at a fixed price of N5,000 for private saloons and SUVs cars, commercial vehicles were charged N7, 500 and in some cases, most drivers went for fake insurance papers, because such papers were cheaper, ranging between N2, 000 and N3,000. They also did this to avoid the wrath of law enforcement agents, as they had little or no knowledge of the benefits of buying original insurance coverage. That was before the National Insurance Commission (NAICOM) reviewed the rate early this year and raised it by 200 percent, from N5, 000 to N15, 000.

A ThisDay Newspaper editorial last month buttressed the point that there is a general apathy for insurance among Nigerians when it stated that insurance penetration remains reportedly at 0.5 percent, indicating that out of Nigeria’s over 200 million people, only 0.5 per cent of the entire population buy insurance.

Quoting a credit rating agency, Agusto & Co, the editorial revealed that penetration rate (measured as a percentage of GDP) of the Nigerian insurance industry stood at 0.3 per cent in 2018, compared with 14.7 percent in South Africa; 2.8 percent in Kenya; 1.1 percent in Ghana; 0.6 percent in Angola and 0.6 percent in Egypt. 

It was also stated that the density of Nigeria’s insurance sector (a measure of industry gross premium per capita) is currently at $6.2 and lags behind its African counterparts such as South Africa ($762.5); Egypt ($22.8); Kenya ($40.5) and Angola ($30.5).

According to Faith Afekhuai, an insurance marketer turned food vendor, in the 1990s, insurance was said to have been operated and handled by quacks, leading to the present day fear, as Nigerians believe that nobody can be trusted, especially with money matters.

While noting that there should be no reason why any family in Nigeria will shy away from insurance, Afekhuai opined that some of Nigeria’s elites who have traveled to several parts of the world believe that, with the economy in Nigeria, insurance cannot succeed here.

She said that the only way to cure apathy for insurance among Nigerians is for the government to make it compulsory for everyone, saying, “I believe this is the only way we can make people take insurance serious in Nigeria, otherwise, no matter the number of meetings, seminars or debates we organise on insurance, only few Nigerians will embrace it.

“Some people believe in insurance but objection from family members and friends creates fear of the unknown in them, making them to opt out,” she added.

In his contribution, Professor Victor Olumekun, a professor of plant physiology from Adekunle Ajasin University, Akungba-Akoko, attributed the apathy for insurance among Nigerians to lack of awareness about its benefits. He submitted that to address this gap, insurance operators, aside being more diligent in their operations, should do everything possible to earn the trust of Nigerians.

Ayo Famuwagun, a teacher, noted that a lot of Nigerians do not key into insurance because they lack confidence in the viability of the insurance companies available. According to him, aside the fact that it is not certain if most of the insurance companies around would have a long lifespan, their ability to really compensate clients in a time of loss is not guaranteed.

He opined that Nigerians would take to insurance only if the insurance companies could earn their trust.