By Adebisi Ikuomola
Insurance has always been seen as a business that exists for continuous sustainability of other businesses. That said, the impact of COVID-19 which affected virtually every sector of the economy has defied economic projections and permutations. The world economic outlook was projected at 4.9 per cent in 2020, whilst global growth forecast for 2021 was put at 5.4 per cent. Overall, this would leave 2021 GDP some 61/2 percentage points lower than in the Pre- COVID-19 projections of January, 2020 (IMF publication).
The wider effect of the pandemic on consumption pattern, purchasing ability and damage done to businesses cannot be over emphasized. The capital market and money markets were adversely impacted as this created liquidity crunch arising from the twin measures by government in imposing lengthier lockdown and general hygienic restrictions which impeded economic activities.
Policy makers across the globe must evolve policies that will create multiple solutions through multi-lateral corporation and collaboration in promoting trade and also building stockpiles of supplies and protective equipment, funding research and providing needful, support for the healthcare systems.
The second wave of the pandemic is predicted to be more deadly than the first wave if pre-emptive actions are not taken to take the sail out of the scourge. At the home front, government is making effort to enforce the COVID-19 guidelines through moral suasion and heightened awareness. Ostensibly, many folks are still to come to terms with the reality of the pandemic. The much touted COVID-19 vaccine is still at the experimentation stage, not with wide appeal.
Succinctly put, there is a positive correlation between the ability of an average folk to afford three square meals a day and their propensity to situate the reality of the ravaging pandemic. Most folks on the street believe this pandemic is a mirage, but statistics have proved otherwise. Globally, we have witnessed more people dying of the virus, even the frontline health workers.
Insurance players at the home front had been involved in various interventionist programmes by providing palliatives and support to the government during the trying times. Other areas insurance could come in handy are provision of life insurance and group personal accident/welfare schemes for the frontline health workers.
Today’s insurance players are faced with the challenges of the dwindling economy, low market penetration and changing consumer behaviour which has changed the paradigm in the way business is to be done. But there is hope in the horizon if the needed economic stimulus is sustained on the long term.