As businesses and individuals adopt cost reduction measures in response to rising inflation and the harsh business environment, the National Insurance Commission, NAICOM, has charged Nigerians to avoid the tendency to shun insurance of their assets.
Commissioner for Insurance, Mr. Sunday Thomas, who gave the charge noted that despite the biting inflation in the country, even as people reduce the cost of expenses, this is not the best of time to reduce insurance consumption.
Thomas stated this at a webinar organised by Coronation Insurance Plc in partnership with Access Bank Plc, with the theme: “Managing Business Risks at a Time of Uncertainty.”
Thomas, who was represented by Mr. Taiwo Adeoye, Technical Adviser to the Commissioner for Insurance, noted that sometimes the gain in reducing cost could be less than what is lost in the long run.
Thomas said: “Because there is inflation and recession in the economy, the tendency to reduce cost is high. Despite the biting inflation in the country, as people reduce the cost of expenses, this is not the best time to reduce insurance.
“Sometimes what we gain in terms of reducing cost could even be less in terms of what we lose. You could say that this is not the time to take up insurance, or this is not the time to insure some assets, but at the end of the day, you may end up eating into your portfolio or bottom-line to be able to find your footing and sustainability.”
According to Thomas, it is good to reduce cost but in terms of insurance, people should ensure that all assets are adequately insured.
“It is good to have a good risk management framework as well as be able to manage our insurances and assets. Many are left with the option of cutting cost, however not all cost-cutting will measure success and some might even end up hurting our businesses.
“As business owners and as businesses spring up, we must ensure that we put the right processes in place in trying to manage our assets and ensure that we have more strategic thinking.
“Risk is part of our business endeavours and the best thing is to evaluate and see what part of the risk you can transfer. The insurance industry has proven its relevance in the affairs of the economy.”
Also speaking, Dr. Femi Oyetunji, Group Managing Director of Continental Reinsurance said that risk is anything that brings uncertainty into the achievement of objectives, as such business owners must identify their risks and the best measures to protect their businesses against such risks.