December 24, 2018

Insurers should take up intensive awareness on benefits of micro insurance to SMEs

In this interview, Head, Agric & Micro Insurance at Leadway Assurance, Mr. Ayoola Fatona suggests ways to deepen micro insurance acceptance among SMEs

By Cynthia Alo

WE are approaching election period, does Nigeria have any insurance policy that protects SMEs from political restiveness?


What are your Insurance needs when you retire?

I am not aware of any policy on that. However, the fire and special perils may be extended to cover these exposures with extra premium loadings which are usually expensive and unaffordable for the SMEs.

Since there is none, what policy do you think should be introduced according to international standards?

The standard political violence and terrorism insurance policy cover will suffice.

So far, micro-insurance has attracted little or no acceptance from SMEs. What is the industry doing to address this?

The industry has been aggressive with media and publicity about micro-insurance both online and offline. In recent times, National Insurance Commission, NAICOM, in collaboration with insurance firms in the country, have embarked on an awareness campaign which is aimed at increasing awareness on insurance and its benefits to the public including SMEs. Leadway Assurance has also been organizing trainings, workshops, and seminars to create the appropriate awareness and publicity about the benefits of micro insurance to SMEs as well as build the capacity of insurance service providers on the concept of micro insurance products as a viable risk management tool.

For years insurance penetration has remained low. What are the efforts being put in place to address this?

The regulator of the insurance industry in Nigeria (NAICOM) has gone ahead to establish sets of rules, regulations and standards for the conduct of micro insurance businesses in Nigeria. More micro insurance products are being innovated with the appropriate overhaul of the distribution channels. All these efforts will surely increase the acceptance and penetration into the SMEs in the future.

Where are we not getting it right? If there are issues, what are the ways forward to reposition the micro insurance to its desired level?

Intensive efforts on awareness on the benefits of micro insurance should be created by all stakeholders. As it stands, only a few insurance firms are actively advertising. More need to get on the train and push out information and awareness programs to educate the public and interest SMEs to take advantage of the benefits of insurance. Furthermore insurance service providers need to think outside the box and be more innovative in their products and services. They must build sustainable distribution models and platforms and have it at the back of their mind that profits on the portfolio will not be immediate.