By Rosemary Onuoha

In order to enable people of low income access insurance covers,  the National Insurance Commission (Naicom) is coming up with  guidelines that will extend insurance services to the poor at a cheaper rates.

The National Insurance Commission  said  that the commission will licence any firm that is willing to partake in the micro insurance scheme, while micro insurance products will be sold through cooperative societies, microfinance banks, among others to the poor Nigerians.

The aim, is to enhance insurance penetration especially in the rural areas, where underwriting firms have done little to capture. It is equally expected to incorporate those who are unable to buy the traditional insurance into the insurance system.

With about 20 million potential subscribers, NAICOM said that it is  expecting N60 billion from micro insurance products.

Chief Yemi Soladoye, consultant to NAICOM  said there is the need for collaboration between Central Bank of Nigeria (CBN) and Naicom to sell micro insurance through microfinance banks in Nigeria, adding that microfinance market has a lot of potential customers of micro insurance products.

He stressed that about two million people currently micro insurance policyholders, stating that because the poor are more vulnerable to risks, they need insurance more than the wealthy Nigerians.

Soladoye said that 75 per cent of Nigerians live in rural and semi-urban area, a ready-made market for micro insurance to thrive. Soladoye said.

“This is an avenue to sell micro insurance.  The product penetrates areas the traditional insurance cannot get to and that are why it is a good platform to increase insurance penetration in the country.”

Speaking on access to insurance, he noted that the current insurance companies failed to appropriately utilise the market potentials which was why insurance is not expanding, explaining that  there should be collaboration between banks and insurance companies  to expand outreach through banks’ outlets.

“Any policy that is below N3, 000 is categorised under micro insurance. And with 20 million microfinance customers, a sum of N60 billion is being projected,” he said.

Delivering his address at the Insurance seminar for Insurance Correspondents in Calabar, Cross Rivers State last week, Mr Fola Daniel, commissioner for Insurance said the development of micro insurance market is indeed, one of the objectives of the Market Development and Restructuring Initiatives (MDRI) of the commission.

The commissioner said his commission has put in place a draft guideline for micro insurance business in Nigeria. “The draft is being exposed to the industry, experts and other stakeholders for their inputs and contributions before the final draft will be drawn and subsequently released to the market. We also intend to collaborate with other relevant regulatory agencies in this drive,” he said.

This, he said will develop insurance market at the grassroots and by extension, increase the sector’s contributions to the Gross Domestic Product (GDP) of the nation.  Daniel stressed that micro insurance holds great potential for developing the insurance sector in Nigeria taking into consideration the population size of the country.