Insurers scrabble for microinsurance products

Soladoye

Chuks Udo Okonta

Efforts by the National Insurance Commission (NAICOM) to deepen insurance penetration through microinsurance, will soon be yielding results as about 20 underwriters are presently working assiduously to evolve products to capture the market.

Investigations conducted by Inspen revealed that the operators are having discussions with experts that would help them to develop the products.
An expert told Inspen that the enthusiasm exhibited these operators, towards embracing microinsurance is healthy for the industry, adding that microinsurance remains the way out of the industry’s stunted growth,  as reliance on corporate insurance products over the years has done the industry little good.

Managing Director Riskguard-Africa Nigeria Limited, Yemi Soladoye, who is also an expert in product developments, said Nigeria has the potentials to surpass South Africa in microinsurance record if not in penetration at least in absolute figure within five years.

Soladoye who also doubles as the Technical Adviser, Nigerian Insurance Consumers Association of Nigeria (INSCAN), said if the opportunities in the country are properly harnessed, the country can within the period topped the African microinsurance market.

He said  Nigeria is ranked 9th out of the 10 biggest microinsurance markets in Africa in absolute figure, but 22 in penetration out of   37 African countries that submitted records on microinsurance performance.

He noted that top on the list is South Africa with 27.23 million insured (54.5 per cent of the population) while Nigeria had 1.08 million insured (0.68 per cent of the population).       

He said: “In considering the performance of microinsurance in a country, we probe into whether or not the insured are voluntary or compulsory insured i.e. microinsurance made compulsory for them as a part of credit facility requirement.  The product usually used here is Credit Life.

“The fact of the matter is that Nigeria has the potentials to surpass South Africa in microinsurance record if not in penetration at least in absolute figure within 5 years.

"Out of the 1,079,000 Microinsurance insureds in Nigeria in 2012, 70 per cent had Credit Life Policy, 7.5 [per cent had Personal Accident, 2.5 per cent had Property Insurance, 10 per cent Savings Life and 10 per cent Health Insurance. In essence only 20 per cent of the numbers were voluntary insured. Usually those under compulsory insurance always don’t know that they have bought insurance.”

To achieve this feat, he urged operators to activate the competing and collaborating opportunities of insurance with other financial services providers, recognize the power of insurance to stimulate the growth of the other sectors of the economy, exhibit the strategic importance of insurance in generating funds for projects of national development and in particular recognize the fact that social impact is a key objective in microinsurance operation.

He added that there is huge opportunity for job creation in microinsurance in particular and in insurance in general not yet utilized at the federal, state and local government levels in Nigeria.