Insurance: Key element to economic growth – NEM Insurance
Life can be quite unpredictable with so many unforeseeable circumstances shaping our daily experiences as humans. But by protecting people and businesses against uncertainties, insurance paves the way for economic growth by protecting dreams. Any robust economic dream therefore relies on insurance to grow. Every sector of any nations economic development requires insurance for sustainability health, commerce, construction, transportation, education, entertainment, and even banks require insurance cover to grant loans. Insurance is, therefore, essential for promoting economic stability and prosperity in today's rapidly changing world. It acts as a barrier against a variety of risks and uncertainties, enabling people, companies, and governments to reduce possible losses to confidently conduct their economic activities. In this piece, we will examine how insurance contributes significantly to economic growth and offer some convincing arguments why it is crucial to a healthy economy. As part of risk management and financial stability, the management and transfer of risks from individuals and corporations to insurance companies are made possible by insurance coverage provided by Insurance companies like NEM Insurance Plc. This enables people and businesses to safeguard their assets and interests by providing coverage against potential losses from unforeseeable occurrences like natural catastrophes, accidents, or losses. By encouraging people to take entrepreneurial risks, invest in new businesses, and increase their economic activities, this risk mitigation function improves financial stability. Investment and entrepreneurship are greatly aided by insurance. Insurance gives investors and business owners the confidence to take on challenging initiatives and innovate by acting as a safety net against potential losses. For instance, insurance coverage is frequently a requirement for startup investment from venture capitalists and angel investors. By guaranteeing loan repayment in the event of unfavorable circumstances, insurance plans also safeguard lenders and foster a more hospitable lending climate. An important source of employment and job creation is the insurance sector itself. Underwriters, actuaries, claims adjusters, and sales agents are just a few of the professionals that insurance companies employ. In addition, insurance helps other firms and industries by protecting their resources, liabilities, and employees. Insurance helps businesses grow and expand by supplying financial security and stability, which opens job opportunities throughout the economy. By reducing the risks involved in cross-border transactions, insurance is essential to promoting global trade and business. To protect themselves from lost or damaged goods during transportation, payment defaults, or political risks in foreign markets, exporters and importers rely on marine, cargo, and trade credit insurance. Insurance, therefore, promotes corporate participation in international trade, which boosts exports, imports, and general economic growth. Furthermore, insurance is crucial to the recovery and reconstruction processes following natural disasters or other catastrophic events. Property, casualty, and business interruption insurance coverage, for example, offer affected people and enterprises cash support, enabling them to repair their assets and continue operations. This quick recovery helps to keep the economy resilient and stable while reducing the long-term effects of such catastrophes on the economy. The Group Managing Director and Chief Executive Officer of NEM Insurance Plc, Mr. Tope Smart said, There is no doubt that Insurance companies play vital roles in stimulating economic growth and development in any country. For instance, as at Q1,2023 we have paid claims over N3billion which cut across motor, fire, marine, Agric and other non-life insurance products. In addition to that, we have also created job opportunities for several professionals across different fields who are currently working at NEM Insurance Plc to add great value to our clients. As a significant employer of skilled labour, the insurance industry can take pride in its influence on different economies around the world, Smart added. It is, therefore, important to note that a strong economy depends on insurance to expand and remain stable. Insurance is essential to promoting economic growth and stability because it offers instruments for risk management, promotes investment and entrepreneurship, generates employment possibilities, eases international trade, and aids in post-disaster rehabilitation. For people, businesses, and the economy, recognizing the value of insurance and promoting its availability and affordability can have significant positive effects. Premiums sold by insurance companies contribute greatly and represent measurable monetary value in the financial and investment operations of any given economy. According to the National Insurance Commission (NAICOM) industry report, the sectors contribution to the nominal GDP was 3.30 per cent in Q4 2022, higher than the 3.10 per cent it represented in the previous year, and higher than the contribution of 2.83 per cent it made in the preceding quarter. NEM Insurance Plc is one of the insurance companies contributing immensely to the growth and stability of the Nigerian economy.