Life insurance can ease financial woes, Kauzi says

CUSTOMARY financial obligations can be made less burdensome if more people are insured, especially in cases of untimely deaths, a Bank of PNG official says.
BPNG deputy governor Gae Kauzi told The National that insurance was a growing industry with a largely untapped market, especially those who rely on their social networks to get through bad times.
“Insurance in generally is a new concept in PNG and in many aspects it is not commonly understood by Papua New Guineans as 80 per cent of our population live in the rural areas and are dependent on subsistence farming,” he said.
“The concept of financial planning is largely non-existent with even banking is not well understood as proven by the large amount of our population being unbanked.”
It is estimated that 77 per cent of the population is unbanked.
“One of the factors that has made insurance one of the less sought-after financial security from a downside risk perspective would be the wantok system,” he said.
“Family members would rather depend on each other or on employed wantoks for financial help when it comes to issues such as medical expenses or expenses in the event of the loss of loved ones then having in place insurance protection.
“BPNG encourages Papua New Guineas to recognise the importance of insurance, especially life insurance, as an essential form of financial protection in the event of accident or sudden loss of life.”
Bank South Pacific Group chief executive Robin Fleming agreed that wantoks can be less burdened by insurance.
“There is a reliance on the wantok system for many parts our lives,” he said.
“But there is the benefit to be gained from using the benefits of more developed financial markets to ensure that wantoks don’t get overburdened in events such as the passing or loss of life.”