By Cynthia Alo
Stakeholders in the insurance and pension sectors have appealed to operators in the two sectors to be sensitive to the needs of their customers by creating products that meet their specific needs.
The stakeholders, who spoke at the 4th annual conference of the National Association of Insurance and Pension Correspondents, NAIPCO, in Lagos, noted that both sectors are not employing the right mode to encourage potential customers as well as to sustain existing ones.
While speaking, General Secretary of the Federation for Informal Workers Organization of Nigeria, FIWON, Mr. Gbenga Komolafe stated that most solutions for the micro pension customers are not practicable and as such the industry could continue to witness low patronage.
He said: “The informal sector is very huge and the rate at which micro pension is evolving is alarming. The Commission do not understand the nature of the informal sector. There is a poor perception about how those operating in the informal sector is approached and convinced on buying into the scheme. We need traditional means of sensitization because the people might not understand the kind of advert that is being churned out. Storytelling will go a long way.
“Also, the sector must work on the best mode of contribution to get people to contribute regularly so that we don’t end up with the kind of situation we had with Nigeria Social Insurance Trust Fund, NSITF, where some people just contribute at a period and after some time they won’t be able to sustain the contribution because of a particular circumstance like loss of jobs, nature or change of job. And the money will be lost for a while and they won’t care about going back to make their claims or even continuing.”
Also speaking, Chairman of the occasion and former Director General of the National Pension Commission, PenCom, Mohammed Ahmad said that there is need to wholly engage the customers.
He said, “We must understand the industry we are operating in. it is important to have more engagements so that we can bring the stakeholders to come and talk to us because if we don’t understand the industry, we cannot serve the industry. We need to understand the reality, appreciate the sector and particularly our perception of the sector. You cannot interact or engage an industry that you do not have a clear understanding. The mode of contribution needs to be sustainable.”
Stressing the need to work on the incentives in the micro pension space, Ahmad said: “This is very important because if I must do business with you then what is my benefit? It should not be because the regulators have made it compulsory or that am forced but because I want to do it.”
Also speaking in a presentation titled ‘Micro pension plan as financial inclusion tool’, Actuarial and Chartered Insurer, Dr. Pius Apere proposed a method to weigh the capacity of individuals in the informal sector on a weekly basis to ascertain how much they can afford to put away before embarking on a retirement plan.
On the way forward, Apere said that flexibility of contributions will encourage small and frequent contribution.
He also noted that allowing for withdrawals before retirement will create incentives, stressing that the provision of IT infrastructures will increase the rate of mass registration.
Also speaking, Managing Director of FCMB Pensions, Misbahu Yola said that there is a huge gap of unreached potential customers that can make a change in the industry and restated the need to design products to suit certain types of people.
He said: “Micro pension plan is not just meant for artisans, we have a potential market of politicians, pastors, entertainers, stewards. This is a huge market that we can tap into. Many of them do not have any form of retirement plan and you will agree with me that a time will come when they will eventually retire and need something to fall back at.”
Also, President of Pension Fund Operators Association of Nigeria, PenOp, and Managing Director of Leadway Pensure PFA, Mrs. Ronke Adedeji said that selling the micro pension scheme is a gradual process that requires creativity and innovation.
According to her, the industry must leverage technology to reach out to many Nigerians in the years to come while warning that there is need to manage expectations and improve on means to reach out to the rural areas.