Expert canvasses establishment of micro-insurance firms

Expert canvasses establishment of micro-insurance firms

Chuks Udo Okonta

The Managing Director Riskguard-Africa Nigeria Limited Yemi Soladoye, has called for the the establishment of micro-insurance firms to help provide insuarnce services at the grassroots.

He told Inspen that the entrenchment of micro-insurance operation which is the third tier of insurance would give people at the grassroot the opportunity to benefit from insurance practice.

He noted that micro-insurance practice which entails retail strategy would boost the industry's premium income. He called for a refocus of the industry, adding that the industry can never develop through the use of a single marketing channel.

He said: "There must be a trigger from within or a threat from without in the industry. The trigger from within will happen when one insurance company decides to change the market by providing improved customer service that will change the focus of the industry. A threat from without is when National Insurance Commission (NAICOM) appreciates the fact that insurance should not be distributed only through the traditional distribution channel.

"In other nations, places like shoprite, cooperative societies and megaplaza distribute insurance. When NAICOM is confidence enough to open the door for retail marketing there would be tremendous growth in the industry. NAICOM would always say they do not have the capacity to monitor such, but they should start from somewhere. If NAICOM opens the doors, what it gets from the N200 billion that is generated now by operators will be multiplied by five.

"For example, let NAICOM tells all insurance journalists that have been on ground for the past three years, bring in application to run a micro-insurance company with statutory capital of a car, rent a room and parlour, have a fan not an aircondition and the total cost must not be beyond N1 million, including application fee of N25,000 and renewer fee of N5,000. That will open up the industry. In countries like the Philipines, they have three tiers of insurance system. just like what we have in the banking sector. The national level operation has its capital base, state has its and the local government. If we do these, insurance will reach every where."

He noted that the un-tapped insurance opportunities can only be harness when the industry set its focus on micro-insurance which has been left fallow for years.