Amid the nationwide protests that began on August 1, risk managers and insurance professionals are expressing growing concerns about the potential repercussions on life and property. The demonstrations, fueled by widespread dissatisfaction, have prompted state and federal governments to urge dialogue over unrest. However, the risk of continued unrest remains significant.
In an interview with the Daily Sun, Mr. Raymond Akalonu, former President of the Risk Managers Society of Nigeria (RIMSON), highlighted the potential impacts on both the insurance sector and the broader economy.
Protests can disrupt economic activities, leading to business closures, decreased productivity, and reduced revenue generation, ultimately affecting livelihoods. Additionally, the damage to infrastructure from protests can result in substantial repair costs, burdening both the government and the private sector.
Investor confidence, particularly from foreign investors, can be shaken by frequent or violent protests, leading to reduced foreign direct investment and economic instability.
Tourism, a vital revenue source, can also suffer as potential visitors avoid countries experiencing unrest, which in turn affects related sectors and exacerbates economic woes.
The ongoing social and economic issues driving the protests may accelerate the emigration of professionals, known as the “Japa” phenomenon, further depleting critical sectors like IT and healthcare.
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For the insurance sector, protests can lead to a surge in claims related to property damage, business interruption, and liability. The #EndSARS protests, for example, resulted in over 11 billion naira in claims for insured losses, highlighting the financial strain on insurers. This increased risk may drive insurance companies to raise premiums, potentially making insurance less accessible to the public and reducing insurance penetration.
Operational disruptions for insurance companies are also a concern, as protests can complicate the processing of claims and other business activities. To address these challenges, the insurance sector may need to offer specialized products that cover strike, riot, and civil commotion risks, and strengthen reinsurance treaties to buffer against large-scale losses.
RIMSON can play a crucial role in mitigating the risks associated with protests by conducting risk assessments, developing contingency plans, and supporting members in securing premises, protecting assets, and ensuring business continuity.
Facilitating collaboration between members, law enforcement, and other stakeholders, as well as offering training on crisis management, emergency response, and conflict resolution, can further empower businesses and individuals.
Insurance products such as political violence insurance, business interruption insurance, property insurance, liability insurance, cyber insurance, supply chain insurance, terrorism insurance, and political risk insurance can safeguard businesses against losses from political and social unrest. While not all these policies are currently available in Nigeria, insurers can collaborate with reinsurers to offer comprehensive coverage.
Collaboration between the government and insurance companies is essential to mitigate protest-related risks. Joint efforts in risk assessment, contingency planning, establishing communication channels, ensuring access to emergency services, developing specialized insurance products, and creating a contingency fund can aid recovery efforts for businesses and individuals.
Nigerian youths are encouraged to exercise their constitutional right to peaceful assembly responsibly, avoiding violence and property damage during protests. Destruction of assets only exacerbates societal problems. By collaborating with law enforcement and engaging in constructive dialogue, peace and progress can be achieved for the betterment of all.
By taking these proactive measures, Nigeria can navigate the complexities of protests while safeguarding its economy and ensuring the well-being of its citizens.
Nationwide protests in Nigeria raise concerns for the insurance sector and economy, highlighting risks like economic disruption, infrastructure damage, and increased insurance claims, urging proactive measures and collaboration.
Nationwide Protests, Insurance Sector, Economic Impact, Risk Management, Investor Confidence, Infrastructure Damage,
