In the face of heavy losses incurred by traders across the country in some recent major market fire outbreaks, many of them are still reluctant to insure their products and businesses or are ignorant of what insurance policy could do to help them maintain balance whenever such disaster happens. ISIOMA MADIKE, in this report, captures the losses, the ignorance and the benefits, which the traders often overlook
Over five major markets across the country have experienced fire outbreaks in recent time, resulting in losses worth billions of naira. It started on Wednesday, October 16, when a fuel tanker fire accident claimed several lives, buildings and properties in the famed Onitsha Main Market in Anambra State. The market is regarded as one of the busiest in the Eastern part of Nigeria.
The traders in that market were still agonising over the incident when another occurred on October 21. This time around, shops were razed, and goods worth millions of naira were reportedly consumed at the Santana Market, Sapele Road in Benin, Edo State capital. Balogun Market on Lagos Island, known for its wide selection of colorful Nigerian and imported fabrics and school bags, was equally on fire on November 5. It was speculated that the fire was sparked by an electrical fault. Before then, a massive fire had swept through the popular Oko-Baba Sawmill, a slum market in Ebute-Meta area of Lagos, on November 3. Several shanties were said to be up in flames as residents ran helter and shelter trying to salvage their belongings.
The GSM market in Maiduguri, the Borno State capital, was also on fire in which numerous properties and shops were reportedly destroyed. The market, popularly known as Jagwol, is located at the Post Office area of the Maiduguri metropolis.
It is a hub for GSM traders and artisans and the biggest computer village in the city. And recently on December 1, fire again destroyed over 30 shops and damaged other properties at the Owode-Oniri Market in Lagos State.
The cause of the inferno was unknown as there is no power supply within the market. However, in separate interviews with the traders, many of them said they would not insure their goods or businesses because they believed that insurance companies were not sincere. There were also those who were ignorant of how the insurance policy works.
For instance, former chairman, Bag Sellers Association of Nigeria, Balogun Market branch, Ignatius Akunedoziobi, said the traders were usually reluctant because most insurance companies delayed in paying compensation over property insured whenever tragedy occurred. He said: “The experience of a few of our members that registered with them (insurance firms) is unpleasant.
These insurance companies are diligent in collecting premiums but when it is time for compensation, they will start demanding unnecessary things. One of our members was asked to bring receipts for goods bought many years before the fire outbreak that gutted his shop sometimes last year.’’ Another victim of the recent fire outbreak at Balogun Market, Peter Chima, also said the confidence many traders had in insurance companies, was gradually fading away.
Chima said he stopped insuring his goods because he did not see the need for it. But in what looked like a contradiction, Chima said he regretted not insuring his goods, adding that he lost goods worth several thousands of naira in the recent fire outbreak in the market. “All that insurance people are concerned about is the collection of premiums, after that, nothing else.
At least, we expected them to tell us what happens to the money if no losses are recorded after a period of time,” he said. Motunrayo Adeneye, who also lost her goods in the fire that gutted Balogun Market, told one of our reporters that her grouse with the insurance companies was that they asked too many questions and are usually not sincere about the policy they want to sell. They can hardly get traders selling here at Balogun to buy their policies because of their insincerity, she said.
“Some of us learnt our lessons from people who insured their businesses and got nothing when disaster occurred. That is the time you see insurance companies coming up with funny clauses that were not initially disclosed.
At the end of the day, we see such exercise as a one in futility,” Adeneye said. The Babaloja (Leader) of the famed Ketu-Ikosi Fruit Market in the Ketu area of Lagos State, Lambe Dauda, said that the premiums charged by the insurance companies scared off the traders, who did not see the need for it in the first instance. He said: “Their premiums are just too high; some of us collected loans from the banks to float our businesses and we are still repaying with interest. We pay close to N2 million per annum as rent on our shops; this is apart from other expenses. So, it will be good if insurance companies can bring down the premium they demand.
That way many of our members could be persuaded to give it a try. “I personally think it’s necessary in view of the recent fire disasters across many markets, not only in Lagos here but all over the country. It’s a welcome idea if you ask me but the insurance companies should be sincere and open for us to understand their policies and the benefits. Most of us are not too literate, so, we need to fully understand the import of what they are selling to us and how such could be of benefit to the traders on the long run.”
Also speaking to Saturday Telegraph, the Financial Secretary of the Ketu-Ikosi Fruit Market, Tajudeen Talin, said the traders had not thought of insuring the market. Talin said insurance operators had not been visiting them regularly.
“The last insurance company that was here came two years ago and we introduced the company to our members, afterwards we did not see them again. Our members lack enlightenment; they find it hard to inculcate other things into their business apart from buying and selling. However, I believe it’ll be wrong to force people to take an insurance policy without proper education.”
Talin also said that some traders had not taken up any insurance policy because of their religious beliefs. He recalled that some insurance companies had come to the market to sell their products but most traders were not interested.
The Admin Secretary of Lagos Mainland Saw Millers Association of Nigeria, Nurudeen Lawal, said that there was nothing like insurance policy in Oko- Baba Sawmill, a slum market at Ebute- Meta, Lagos.
He however, believes that no insurance company will want to take such risk because, according to him, the environment already looks like it is prone to fire outbreak. He said: “The risk will be too much for them (insurance firms), so, this market is not attractive to them.
Some banks have been here to address us on a number of times. One insurance company at Sabo was also here. We actually listened to them but when they see that the policy and packaging they want to introduce to us do not favour them, they just stylishly promised to return to us. But that never happens. “I think our industry is not the type they can invest in because of the high risk.
Our market is built into a residential area and that makes our merchandise more vulnerable to fire incidents. The fire that happened recently started from a small 8 by 10 house and the owner of the house was not around. If we had taken an insurance policy, how would they have compensated everybody?”
Brendan Okafor of Emmy Bright Company, who sells clothes and footwear at the popular Dugbe Market in Ibadan, Oyo State, said he did not believe in insurance policies. “I don’t have any insurance policy.
I don’t have fire insurance and this is because insurance in Nigeria is not something to write home about. They are not relevant in Nigeria. This is because many people do not believe in it. “If one subscribes to it, by the time you need their intervention, they will be telling you all sorts of stories; dribbling you around like a fool. It may be working well in overseas, but in Nigeria, it is a different ball game. It is a good idea, no doubt, if only practitioners in Nigeria can make it work like those in other climes,” he said.
Asked what preventive measure he takes to safeguard his goods and business since he did not believe in insurance cover, the trader said: “I have fire extinguisher and other fire preventive devices in case there is any incident of fire outbreak. To the insurance companies, my advice is that they should be transparent in their dealings. Let them explain in details the contents of the policy they are selling.
Trust is everything. People don’t trust the insurance companies and they too are not helping matters as they hide some secrets from customers at the point of taking a policy. That supposed not to be. “They should explain to the customers the workings of whatever policy being taken. This is because not all traders are literate enough to understand how it works. If there is no trust, many people like me will not want to take insurance policies.
If there is any incident of fire outbreak, the insurance operators should come out clean and not play any prank on the investment of the policy holders.” Another trader in Dugbe Market, Emeka Sunday of E.C. Diamond Company, however, has a different view about insurance policies.
Though he said he was not sure whether his boss had ever taken any insurance policy before. “I am not sure my boss insured this shop or the goods in it because I am not the owner. I am not even sure if any trader around here believes in fire insurance policy. But by the time I have my own shop I will make sure I insure it because of the benefits. It will not only be my shop but my property generally. Anything can happen anytime and so to be on the safe side and guard against severe losses, the best thing is to take insurance cover. It is very essential. Though many people don’t like it because of the high premium they will pay,” he said.
A woman trader, who sells travel bags also in Dugbe Market but preferred to be anonymous, said she took Life Insurance policy some years ago, but she was no longer active in payment of premium.
She said that she refused to take fire insurance policy because she did not believe in insurance companies redeeming the loss through compensation payment. Apart from relying on the power of prayers, she said she was always very cautious not to allow fire to break out in her shop. In view of the seemingly ignorant position of the traders concerning insurance policies and addressing issues related to the risk protection and incessant market fires, Saturday Telegraph, asked some insurance experts how fire-risk protection could be worked into the architecture of market administration across the country.
Head, Corporate Communications, Nigerian Insurers’ Association, Davies Iyasere, said: “If you want me to answer it, I’d just say, education, awareness, and preaching.
“It’s like trying to convert one from a position to another; you need to really classify it first. People talk of one concept, the mosquito marketing. I don’t know if you have heard it before. If a mosquito visits your ear, when it comes, it makes some noise. If you want to kill it, it flies away. It comes back in the next five or three minutes, if you want to kill it, it tries to draw your attention that it is still around. I believe that it will work; to continue to reinforce messages to them.
“Let them know and if there are beneficiaries among them, those that have had encounters with insurance and had benefited from it, their testimonies will really go a long way. I believe that some of them are also not opening up to other viewpoints because none of them will claim not to have come across one insurance marketer or the other but it’s just that they consider insurance as some form of robbery or some kind of illicit endeavour. That concept, that idea about insurance has to change.
It is a way of life and the sooner they make it a way of life the better for them.” On the issue of high premium the traders complained about and the possibility of not being able to receive claims in the event of a disaster, Iyasere believes it’s a matter of understanding. He said that the traders needed to understand that insurance people were in business also.
He said: “I’d just recommend that they go to an insurance agent or broker, who will explain the details of the insurance contract to them so that they can understand it fully because, if you buy a car and you insure it against accident or fire and you run into a mob, and they damage it. That one is not like normal accident or fire.
It’s as a result of mob action. You didn’t hit another vehicle, you were not just driving on the road and your vehicle got burnt, but you perhaps ran into a mob and because of mob action, they damaged your vehicle. “If you come and claim under that, they will tell you it’s not covered.
Those are the details they need to know; the exclusions, the extensions that the package they are taking, covers. So, I will advise that they ask the insurance marketers to explain to them all the details of everything, the type of insurance product they are taking, covers. “On high premium, they should know that premium is a function of what you are covering. If you buy a Gwagon, for instance, for N10 million, it would not be the same as somebody who is using a Corolla car of less value.
So, it’s a function of the volume, or the premium you attach to what your policy covers. “If you buy a G-wagon and you want to cover it as just a third party vehicle you pay five per cent, but if you want to do it for comprehensive, you pay like 10 per cent of the cost. Maybe through negotiation they can come down to eight, seven or five, as the case may be, but it is the premium you place on your property that determines what you pay and what you get when it is time for claims.
“What I’m saying in effect is that what you pay determines what you get when something happens. If you do a third party for five per cent, you can’t expect that when you damage your vehicle, you ask them to pay.
Third party only covers the other person you have damaged his vehicle but if it’s comprehensive, you can take care of your own, and that of the other person. So, they need to be educated, they need to be enlightened, and they need to be constantly engaged.” Another insurance expert, who does not want his name in print, said: “Fire insurance is an affordable insurance policy yet most people do not subscribe to it.
The level of public apathy towards fire insurance can be attributed to various factors such as lack of confidence in the insurance sector (owing to the belief that insurance companies do not pay claims), poor awareness creation by both the government and the insurance companies, traditional and religious beliefs (a judgmental attribute that holds strongly to the ‘god’ or ‘deity’ factor) that defines the way of our people.”
Additional reports from Sola Adeyemo (Ibadan) and Oluwasanya Oluwatoni
… CLICK HERE TO GET IT!