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

According to Soladoye, 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 air-conditioner and the total cost must not be beyond N1 million, including application fee of N25,000 and renewal 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 this, insurance will get to everywhere in Nigeria.”

Soladoye noted that the insurance industry needs a treat from without, stressing that the treat would come when the National Insurance Commission, NAICOM, appreciates the fact that insurance should not be distributed only through the traditional distribution channel.

It will be recalled that NAICOM said it will soon release the guidelines that would help unlock the over N60 billion microinsurance untapped opportunities in the country. It was gathered that NAICOM is putting finishing touches to ensure the release of the much anticipated guidelines that would help deepen the retail market and take insurance to the grassroots.

The operational guidelines are 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.