Saturday 17 January 2015

Mitigating Fire losses through Insurance


One of the major disasters that has the capacity to wreck or slow down economic development of any nation is fire. Nigeria has definitely had her own share of this disaster over the years. Statistics available from the Federal Fire Service indicate that on the average, there are overhundred major fire disasters yearly across the country, with Lagos State coming tops on the list.In 2012 alone, Federal Fire Service, Lagos State Command said it recorded 188 fire incidents. In 2013, fire incidences were recorded notably inOdo-Ogbe Market in Ile-Ife, Osun State; Ilubirin market Ebute-Meta, Alade market, Ikeja inLagos State as well as Kuje Market in Abuja.

In 2014, many of similar incidences include that of Mile 1 market in Portharcourt, Sawmill market fires in Pako market, Ipaja Lagos. Other major fires in the past were the Tejuoso marketfire, the Kano main market fires and the Idumota fires which claimed properties running to billions of Naira, and in some instances, lives were lost.

Of grave concern in recent time is the rampaging effect of fire on major markets across the country with its attendant effects of inflicting further miseries on the unorganized private sector and entrepreneurs who are worst hit each time the incidence occur. For instance, while Nigerians were making projections and preparing for the new year, they were welcomed by the sad tale of fire outbreaks that ravaged some popular markets almost at the same time, they are Balogun,Oko Baba Sawmill in Ebute Meta and four other houses in Igando area of Lagos State.

What a sad way for Lagos market men and women to be ushered into a new year as lamentations reached high heavens by market traders who lost their wares, amounting to estimated at billions of naira within the same day and same time frame. As if that was not enough, news filtered in that the Iron Rod market, Agodi Ibadan had been ravaged by fire.
Although, the initial reactions of concerned citizens and individuals were to empathize in words and sometimes by doling out stipends (in comparison to what had been consumed in inferno). Accepted that government, concerned philanthropic individuals usually rise to give some form of token support to the victims, such assistance were only momentary and most times too small to return the marketers to the position they were prior to the sad incidence. In a nutshell, the step may not be the best for the victims and potential victims of fire in the country as they could embrace a new re orientation on risk mitigation and control through insurance.
It is noteworthy that risks of fires are usually a primary concern of the insurance industry predisposing victims to better recovery in the event of fire. Regretfully, this has not been the case in Nigeria partly because of low awareness about insurance as well as its benefits to mankind,irrespective of their business or chosen avocation. The insurance industry has generous fire policies to cover loss or damage to shops, wares and stock as well as consequential losses arising thereof through which insurance clients (often called the insured) could benefit.
Going by the seeming complexity of insurance, it has often been canvassed that the engagement of registered insurance brokers for the interpretation of fire insurance policies like other policies of insurance will allow the insured to maximize the benefits on their insurances. Insurance brokers who are professionals intermediaries in the insurance sector also could give regular personalized services to clients and assist them in getting the best possible rates for their policies from existing insurance companies in addition to following up and collecting claims on their behalf. These and many of such roles are difficult to get by insurance clients who are usually not knowledgeable enough about operations in the industry.
The importance of insurance in mitigating fire is definitely not lost on insurance operators in Nigeria who occasionally make efforts to reach out to the unorganised private sectors canvassing that they imbibe insurance as a wealth protection device. They often advocate that whatsoever is worth having and keeping is worth being insured. This translate to the fact that expression of emotional outburst after the occurrence of a loss, like the ones in question, could be tantamount to literarily closing the gate after the horse had bolted off.
This was part of the views of the President of the Nigerian Council of Registered Insurance Brokers (NCRIB) during a recent awareness visit to the Iyaloja General of Nigeria, Chief (Mrs.)Folashade-Ojo in Lagos. Mr. Shoderu used the opportunity of his visit to reecho the need for the market men and women to embrace insurance, stressing that they (market men and women) are prone to diverse risks that daily threaten their existence. The most significant threat, according to him is fire outbreaks which he said had led to loss of lives and loss of billion of naira worth of materials when they occur.
He said, “In spite of the fact that the world we live is daily prone to risks, both to the individual and corporate institutions, it is a matter of regret that only few Nigerians understand the value of insurance, talk less undertaking it. Unlike in advanced countries where insurance has been taken as part of the culture or way of life, serving as their best succor in times of losses, Nigerians have continually shunned insurance to their ultimate disadvantage.
“Apart from helping to preserve wealth, insurance is the last hope of the common man. Although, reasons for poor acceptance of insurance are many, the major ones are poor image and low awareness about the industry as well as wrong notion about what the experience of someone close to one had been in the past.
Pulling down the banner of knowledge, Shoderu said, “today, the story of the industry in Nigeria has changed positively, as insuring clients could now bank on responsive and responsible professional bodies and regulatory institutions that could take up their cases in the event of infringement of contracts, usually during claims payment.
Mr. Shoderu enumerated available insurances like burglary, consequential losses, goods and money in transit, house holders, all risks insurance and motor insurances to the advantage of the clients. Most of these insurances, according to him, go for as low as N2,500 for goods that worth N1 million per year.
Whilst government and many trade associations strive to come to the aid of their members in the event of fire losses, it is expedient for leadership of traders and market associations to forge closer collaboration with the insurance industry for the benefit of their members. It is only when this is done that the burden of replacement of destroyed goods and properties become responsibility of insurance professionals, refunding the victims to the actual places they were prior to a loss, irrespective of the magnitude.  
To corroborate the usual and initial response of government to incidences of this magnitude, the Lagos State Governor, Raji Babatunde Fashola, on his arrival at the Balogun market sympathisedwith the victims and straight away promised to rebuild the structures and help the traders get back on their feet. In his words, Fashola said, “We need to know the number of people working here. We need to have a clear description of what businesses they are doing and the value. Once we authenticate and verify these, we assure you that this government will come to your aid’
Fashola needs to be commended for this gesture; however, suffice it to say that the government needs not bothered itself with replacement of goods and rebuilding of burnt properties if insurance has been given its right place. In other climes, insurance takes responsibility for both the wares and damaged properties, but in Nigeria, only magnanimous few who understand the workings of insurance get involved, and in most cases, blue chip companies.
Nigerian government in collaboration with insurance industry need not waste further time in creating adequate awareness about insurance as well as give impetus to the implementation of compulsory insurances that majorly impact on the low class of the citizens. This will enable government to use the available resources on national development and leave the risk bearing business strictly to insurance professionals.

Dele Ayeleso is the Public Relations Manager of the Nigerian Council of Registered Insurance Brokers (NCRIB).

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