The National Insurance Commission, NAICOM, has observed that given the high inflation rate and recession in the national economy, has significantly reduced the purchasing power of consumers of insurance.
The Commission however, advised that this is not the time for the public to ignore insurance in mitigating risk.
The regulator therefore urged consumers of insurance products not to abandon the sector because of the economic crisis facing the country.
It said despite the impact of the economic recession currently being experienced in the country, the insuring public should continue to embrace insurance.
The Commissioner for Insurance, Sunday Thomas, made the appeal Monday at a webinar conference organized by Coronation Insurance Plc in partnership with Access Bank Plc.
The NAICOM boss who was represented by the Taiwo Adeoye, Technical Adviser, spoke on the theme, “Managing business risks at a time of uncertainty.”
He 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.
“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 measure is 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.”
He said risk is part of business endeavours, adding that entrepreneurs must be able to evaluate and see what part of the risk to transfer.
He commended Coronation Insurance Plc collaboration with Access Bank Plc, saying that their partnership had come to align with the commission’s campaign of financial education and inclusiveness.