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When Small could mean much

By Patience Saghana
Insurance companies ready to generate premium from micro-insurance, appeal for a guideline to enable them have a backup to fully go into the business. Patience Saghana writes


Insurance operators have made a request to the National Insurance Commission (NAICOM) for a guideline that will endear insurance companies to micro-insurance, following the age long neglect of small insurance business by the sector.

The request for a guideline on micro-insurance, according to insurance practitioners, will help steer the sector to judiciously take micro-insurance business seriously.

Operators also argue that the guidelines on micro-insurance will not only prevent conflictions in the insurance laws under review but also to clearly guide the industry on key areas to cover.

Dr. Ernest Bai Koroma, Sierra Leone President declared that the insurance industry in the West African sub-region had for many years largely limited itself to the non-life sector.

According to him, “And even in this non-life sector, we have mainly been confined to the relatively safe transport, trade and related sectors. We can play a more positive role in our nations’ development by expanding our interventions in the non- life sector and moving into the life insurance sector”.

“Areas that cry for our expertise, goodwill and resources in the non-life sector are agriculture and small businesses. An overwhelming majority of the people of our sub-region are engaged in agriculture and small businesses. But these are sectors hampered by limited access to capital, inability to benefit from economies of scale, and generally inadequate attention from the financial services industry”

“We could devise credit guarantee schemes to improve access to finance for farmers; we could, in collaboration with governments provide insurance cover to farmers; we could in cooperation with government organize farmers into cooperatives as a means of pooling resources together and mitigating against risks. A risk shared, it is said, increases the likelihood of overcoming that risk”.

President Ernest Bai Koroma who recalled his very first visit to Nigeria in 1980 said, “I know the industry faces a lot of hurdles. I know we are saddled with low regional integration, poor regulatory frameworks and internal controls, lack of investment avenues, low insurance density and the smallness of the middle class who are traditionally some of our biggest clients. But I also know we have the wherewithal to scale these challenges and unleash the energies of the insurance industry for accelerated development of our nations”.

The Sierra Leone president who was in Nigeria last week  for two day last week to deliver a key note address on The CIIN @ 50:  of the Chartered Insurance Institute of Nigeria was accompanied by two senior Government Ministers including the Hon. Minister of Foreign Affairs and International Cooperation, Madam Zainab Hawa Bangura, and his financial team including Hon. Minister of Finance and Economic Development, Dr. Samura Kamara, Personal Assistant to the President, Brian Gilpin and other senior government officials including the Financial Secretary and nominated Governor of the Central Bank of Sierra Leone Mr., Sheku S. Sesay, and five others.

For someone who spent more than 30 years in the insurance industry, it is always a pleasure for me to touch base with the profession that nurtured my formative years in business and fashioned my orientation to life and work in the public place.

Today, if I enjoy some confidence in my ability to manage the affairs of state and to meet the formidable challenges that come with the high office of Head of State. I also see the insurance industry playing a key role in mobilizing resources for productive investments in our poor and fragile economies. For decades now, we have depended on resources mobilized elsewhere to grow our economies and fund our development projects. But these resources are often yoked with interests and mentalities that have not augured well for us.

Mr Sunny Adeda, the new president of the Chartered Insurance Institute of Nigeria (CIIN) said the CIIN in the interest of the entire insurance industry would dissipate energies in the direction of progress with an action centered plan to take our institute to the next level.

He said, “Professionalism is the bedrock of any profession, I will therefore enjoin all my colleagues to always act professionally particularly now that the world (Nigeria not an exception) is facing economic recession resulting from the crisis in the developed economies.

As professionals, we are indebted to our profession to make it better than when we entered. We should therefore devote our efforts at advancing the profession”

“No nation can develop without embracing modern insurance. It is a known fact that Africa generates only about 1 percent of the World Insurance Premium while South Africa and North Africa accounts for 84 percent of that 1 percent. The rest of the African countries including Nigeria share the remaining 16 percent of 1 percent”.

“I have come to realize that the major impediment to the penetration of Insurance in Nigeria is lack of Awareness, coupled with the culture and attitude of our people. It is therefore my desire to make an impact in the area of Awareness creation for the Industry”

Professor Joe Irukwu, a chartered insurer and legal luminary without mincing words said that the Nigerian insurance industry have not done well in the areas of grass-root insurance, adding that the sector had concentrated energy on general insurance which  generate considerable premium unlike the micro-insurance.

He stated, “We have not given enough attention to the need to localize insurance in Nigeria rather we have intensified efforts on general insurance business”

However, the insurance doyen noted that President Ernest Bai Koroma as Sierra Leone helmsman brought a lot of respect to insurers not only in Sierra Leone but also to the Nigerian insurance industry and the world at large.
“Having seen him a Chartered Insurer, and a President of a Sovereign state, we in the Insurance world consider ourselves lucky persons to find ourselves in this noble profession.”

Irukwu said the institute of chartered insurers in Nigeria is very appreciative of the sacrifice President Koroma made by giving preference to the institute despite his busy Schedule in Sierra Leone.

The Professor said “the presence of President Koroma in our midst actually demonstrated loyalty to this profession and it’s a mark of respect for us the Chartered Institute of Insurers, an institute which he attended.”

He recalled the early 2000’s, when President Koroma informed him that of his intentions to go into politics. “He came to my office in Lagos and informed me: I expressed doubt and said, it is not easy to be successful in Insurance and Politics at the same time.”

“Insurance deals with risk, but my brother, it is more risky and dangerous to venture into politics. But if it is the will of God, you will be the President of Sierra Leone. Today, we now know, it is indeed the will of God for you to become the President of Sierra Leone. We feel happy, that you are now the president of Sierra Leone.”

Alhaji Mohammed Kari, managing director of UnityKapital Insurance Company agree with the trend in the world at present to focus on micro-insurance which he admitted the nation’s insurance industry had for long given little or no attention to.

Kari said the Nigerian insurance operator had disregarded the micro-insurance business even at their own expense.
But he said that it is not too late for the insurance to pay attention to grass-root insurance. “It has always the convention that it was easier to get general business which is either corporate or public. We do not go to the individuals and that is why the bulk of the business is.

The UnityKapital insurance boos confirmed that an appeal has indeed been made to the government and the regulatory authority to consider a guideline for micro-insurance in order to avoid conflictions in the laws.

“An appeal has been made to the regulator while the insurance laws are being reviewed to issue a guideline that will get insurance companies to go into micro-insurance big time. And l believe that the appeal for guidelines on micro-insurance is something that is what considering”

Mr Ogala Osoka, former Managing director of Nigeria Reinsurance Corporation believed that insurance industry and the economy would develop more if they focus on agricultural insurance.

“Though, agricultural insurance is not well developed in many part of Africa. So the body thought about the situation and decided on the theme to enable exchange of ideas among countries are experienced in agric insurance and those that are not vast in the field”

At the end of the day, insurance and reinsurance companies will put their heads together and come out with the best ways to protect farmers against the vagaries of the weather’

Though, Osoka said that insurance industry has indicated interest in agricultural insurance but the farmers themselves are not helping the insurance to help them. “It is not that insurance are running away from agriculture insurance but the fact that the farmers themselves have not fully embraced insurance but we hope that with time, the farmers will realize the importance of insurance.

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