NAICOM offers to create level playing field for players in micro insurance

Determined to attract new investments into the micro insurance segment of the Nigerian Insurance industry, where a large segment of the uninsured public would find interesting to buy risk, the National Insurance Commission (NAICOM) is assuring a level playing ground for all operators. Consequently, the Commission is offering the carrot to those who understand micro insurance model; manpower issues and capacity across the entire value chain; develop environmentally friendly products based on market research and ensure effective marketing that speaks to the micro-insurance client.

Other fundamentals according to the commission are that such operator must be prepared to enhance after sales services, such as prompt settlement of claims as well as intermediation models.

Fola Daniel, commissioner for Insurance who spoke at a BusinessDay Round Table on insurance noted that if closed attention is paid to these challenges, success would have been achieved in realising two key objectives of developing a people friendly products and attraction of large segment of the populace not currently utilising insurance mechanism as means of managing their risks.

Daniel said the guidelines which will soon be released will among other things create a framework to allow emergence of specialised micro insurance underwriters; create a clear rules of allowing the use of individuals and legal persons to intermediate; allow flexibility in insurance commission regime and allow composite micro insurance products by any licensed insurance company.

The guidelines would further specify modalities for improving micro insurance consciousness and culture as well as guarantee a level playing field in the market.

Daniel, who was represented by Thomson Barineka, director inspectorate, National Insurance Commission (NAICOM) said after its Micro-Insurance Diagnostic Study in 2012 revealing that 70 percent of the country’s 150 million population are living below poverty, while 52.5 percent are living in the rural areas, it has commenced reforms and regulations to institute micro insurance as part of efforts to deepen insurance penetration in the country.

“It is a take-home that an effective public and stakeholders’ enlightenment scheme as well as good regulatory framework are essential for achieving sustainability and expansion of conventional insurance and micro insurance services to lower income group.” According to him, the Commission is working out a guideline that will enable players’ key in and also create a platform that will allow new investors into the micro insurance business.

“It is therefore expected that the insurance industry would leverage and key into this opportunity by developing the needed micro-insurance products and services tailored to support, protect and assist the low income populace to alleviate poverty.”

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