Vanguard (Lagos)

Nigeria: How Government, Insurers Can Collaborate Against Flooding

Last week some parts of the country witnessed the first rain of the year. Judging by the intensity of the downpour, stakeholders in the insurance sector have renewed calls for collaboration between government and the sector to mitigate losses that could arise as a result of the impending flood

The flood disaster that ravaged many parts of the country last year revealed the low level of insurance patronage in the country. Consequently, insurance operators took it upon themselves to enlighten the general public and government at all levels about the importance of insurance in disaster management. Most importantly, insurers canvassed the need for collaboration between government and the insurance sector to join forces to ensure that flood disasters don't leave such massive devastation as experienced last year.

Despite these various enlightenment programmes, the government is yet to make any attempt to collaborate with the insurance sector.

This year, some parts of the country have witnessed the first rainfall, and from the intensity of the downpour, there is the tendency that this year's rain is going to be heavy. Hence the question, "What plans for prospective displaced citizens after the floods?

It will be recalled that many victims of last year flooding are still homeless as the floods carried away their homes while others lost their sources of livelihood. It is in this regard that experts have canvassed that the flooding and cases of related environmental hazards make insurance the way to go for Nigerians.

According to the President of Chartered Insurance Institute of Nigeria, CIIN, Mr. Wole Adetimehin, insurance remains an essential index for measurement of national development although lacking in its expected degree of presence in both individual and national consciousness, especially in developing countries like Nigeria.

For Managing Director of Lasaco Assurance Plc. Mr. Olusola Ladipo-Ajayi, the service which the insurance industry renders to the economy and Nigerians is not just about making money for insurers but also preventing losses in the economy and the country at large.

Need for collaboration

According to insurance experts, there is need for collaboration between the insurance sector and government more than ever before, because Nigerians are presently exposed to all kinds of disasters both natural and man-made.

According to the Executive Vice Chairman of Industrial & General Insurance Plc. Mr. Remi Olowude, there is need for immediate introduction of flood insurance and a catastrophe fund coupled with the fact that the industry needs to collaborate with the Federal, State and Local Governments to set up a National Flood Insurance Fund Programme.

Olowude said that the scheme will provide insurance coverage against property loss from flooding, landslide, rainstorm, etc. and protect insurers from illiquidity arising from massive claims.

"It is imperative to seek government involvement in the project because the perils covered are more or less fundamental, and when they occur, the poor are usually the dominant casualties. Unfortunately, this segment of our society can least afford the cost of conventional insurance," Olowude said.

According to Olowude, the frequency, intensity and spread of these disasters have placed an enormous responsibility on insurers to create special pools that will not only cover certain fundamental risks of oil spillage, transportation, tanker explosions, etc., but will also address the phenomenon of climate change and the associated tragedies caused by flood, landslide, earthquake and vagaries of weather.

However, Managing Director of Linkage Assurance Plc. Mr. Gus Wiggle said the attitude of the public of waiting on government to carry all risk that emanates from flooding while not making any effort of their own to safeguard their lives and property against peril is wrong. He said, "You know our character towards insurance in Nigeria, we are not proactive enough in wading off disasters because we don't have the insurance culture and this has been to the detriment of Nigerians."

Adetimehin on his part said that these environmental hazards are of great concern to insurers as they constitute threats to the insured and potential insured.

Ladipo-Ajayi however added that most Nigerians are averse to insurance because they don't see any value in insurance; however, if some of the property destroyed by flood last year had been covered under any household policies, their owners would have received adequate compensation from the insurance industry.

The way forward

Last year's floods no doubt left massive devastation in its wake; however, with insurance the level of loss and destruction can be greatly minimized. To this end therefore, the general [public must deem it fit to embrace insurance in order to adapt and mitigate risks associated with flood and other natural disasters, experts have cautioned.

Lead Strategist Medialogistix Limited, Dotun Adekanmbi, said insurance remains one of the best ways to adapt and mitigate risks.

Managing Director of Consolidated Hallmark Insurance Plc. Mr. Eddie Efekoha said that there is no gainsaying the obvious that the country is threatened by these events, adding, "We have had this flooding incident and there were a lot of temporary camps for many of our brothers, sisters and friends in affected areas, and this is a major challenge for government and the insurance sector."

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