Uptick in unemployment insurance amid job losses

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The aftermath of COVID-19 pandemic and economic lull across sectors resulting in increasing job loss and their attendant hardship on affected employees and their families have increased relevance of insurance in protecting people who lost their jobs.

This is also creating investment opportunities for innovative insurers who could think outside the box to come up with likable products that can address some of the challenges employees and households are facing as a result of job loss.

Meanwhile, a few insurers that have products that address the challenges people go through in times of unemployment, findings show, are seeing increased demand and appreciation of the products by a large number of consumers.

Employment or Unemployment Insurance (EI), as individual companies prefer to call it, provides temporary financial assistance to people who have lost their jobs through no fault of theirs, while they look for another work or upgrade their skills.

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According to the Nigerian Bureau of Statistics (NBS), unemployment rate in Nigeria increased to 33.30 percent in the fourth quarter of 2020 from 27.10 percent in the second quarter of 2020. In Nigeria, the unemployment rate measures the number of people actively looking for a job as a percentage of the labour force.

Bernard Ochulor, who worked with rested Presidential Insurance Company Limited, says one the products that the company had, which is yet to be found in the Nigerian market today, is unemployment insurance cover.

Such a product can be structured to meet an individual’s need, depending on what condition or circumstance the person would want to be paid his or her benefit, Ochulor states, but it can be comforting at the most needed time.

“Unemployment Income Protection Plan offers you the income that you need while you are out of work. Unemployment Income Protection is also essential for people that pay a mortgage,” according to experts.

“If you get sick due to an illness and you are unable to work, the extra coverage is very nice to have. You would not have to worry about losing your home and you would be entitled to a large portion of your gross salary. You would be able to stay home while you heal and recover from your illness or accident,” Ochulor says.

Akinyemi Alebiosu of the Strategy Department, Leadway Assurance Company Limited, notes his company has a similar product, but bundled into its life policy called ‘Leadway Life Style.’

Since loss of jobs is becoming increasingly a trend, it is important that insurers become nimble, that is, provide solutions rather than as conventional products, Alebiosu states.

Anchor Insurance Company Limited is one insurer that is currently having a product called Loss of Employment Insurance Scheme (LoEIS).

The company says the product is coming as a measure to help people who lose their jobs to cope with financial needs pending the time they secure a new job.

According to Anchor Insurance, the product is born out of intensive research, market survey and test marketing locally and abroad since 2011 by Universal Risk Management And Actuarial Services Limited, an indigenous actuarial service consulting firm.

It says it relied on the competence and relationship between URMAAS Limited USA, PolySystems, Inc USA, and URMAAS Limited Nigeria to make a success story from the product.

It also explains that the product provides cover against sudden loss of employment income for a reasonable period of time that the victim could regain employment and flow of income resumes.

“This product provides benefit for a member who lost his employment through no fault of his. The policy will continue to provide a financial cushion against income losses from temporary unemployment,” the company explains.

In the event of loss of employment, the policy will pay the insured, the salary earned last in the employment for a period of time during which period the member may have regained another employment, subject to a maximum period of 24 months.

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