Covid-19 highlights why African consumers must protect themselves

Covid-19 pandemic Covid-19 pandemic

The Covid-19 pandemic has made African consumers more aware of the need to protect themselves against risks such as illness, accidents and even death. The question most consumers have is how to plan for such risks.

Francis Gota, CEO of micro insurance company aYo Intermediaries Ghana Limited, says while consumers are becoming more knowledgeable about financial products like insurance, many gave up their insurance policies at the height of the pandemic because of financial stress, leaving themselves even more exposed.

"Covid has taught us that a crisis can occur at any time, and we need to be well prepared. Many people who earn an income had to choose between paying their premiums or buying food for their families. We saw regular income earners lose their jobs, whereas irregular income earners couldn't get jobs to do. As a result, those who could least afford it were left even more vulnerable," said Mr Gota.

Numerous studies have shown that people with low incomes are more vulnerable to economic shocks and financial risks. Events like loss of employment, illness or disability, or the death of a family member can affect a household's ability to meet their financial obligations and debts. In many cases, these shocks can shift them below the breadline.

There is increasing recognition that access to quality and affordable financial services products performs an important role in reducing inequality and poverty. Insurance is not limited to only the well-to-do in society, but also protects people with low incomes and those working in the informal economy against accidents, illness and death.

"Although insurance is not a savings tool, it certainly helps consumers prepare for risks. Making room for affordable life cover or hospital cover with a reputable insurance company like aYo gives them access to their cover through their mobile phones, thereby putting them in a better position to weather economic shocks," said Mr. Gota.

Accident and illness cover can be used to pay medical bills and even make up for lost income if consumers can't work as a result of illness, providing them with their own safety net that is 100% reliable.

"Covid-19 has shown us that there are millions of Africans who would benefit from having insurance. As we emerge from the pandemic, we are seeing consumer incomes bouncing back, and more individuals taking out insurance with small premiums. As long as people have an income, it will need protecting," said Mr. Gota.

Source: www.theheraldghana.com