How to make microinsurance work - Soladoye

Chuks Udo Okonta

The Managing Director Riskguard-Africa Nigeria Limited, Yemi Soladoye, has suggested that experienced individuals with little capital should be allowed to participate in the proposed microinsurance business.

He told Inspen that there is an urgent need for the nation to have three tiers of insurance practice - underwriters, brokers and microinsurance operators, adding that the system would really help take insurance to the grassroots.

He said: "If NAICOM opens the doors for retail business, what it gets from the over N200 billion that is generated now by operators will be multiplied by five. For example, let NAICOM urge all insurance journalists that have been on ground for the past three years, to bring their 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 Philippines, they have three tiers of insurance system, just like what we have in the banking sector. The national level, which is the first tier operation, has its capital base, state has its and the local government, has its capital base too . If we do these, insurance will reach every where."

He noted that the insurance industry needs a threat from without, stressing that the threat would come when NAICOM appreciates the fact that insurance should not be distributed only through the traditional distribution channel.
The Commission it was learnt will soon release the guidelines that would help unlock the over N60 billion microinsurance untapped opportunities. It was gathered that the commission is putting finishing touches to ensure the release of the much anticipated guidelines, that would help deepen retail market and take insurance to the grassroots.

The operational guidelines is expected to strengthen the collaboration between insurers and micro finance banks which are anxiously waiting to leverage on it to secure the loans granted to their customers.