November 9, 2022

Experts call for redesign of micro insurance, pension plans

Pension fund

By Cynthia Alo

Insurance experts have called for the redesign of the micro insurance and pension plans to accommodate both the Nano enterprises and Small and Medium Enterprises (SMEs).

Micro Pension Plan refers to an arrangement under the Contributory Pension Scheme (CPS) that allows the self-employed and persons working in organisations with less than three (3) employees to make financial contributions towards the provision of pension at their retirement or incapacitation.

The experts, who spoke at the 7th edition of National Association of Insurance and Pension Correspondents, NAIPCO, conference in Lagos, said that operators must recognize the segmentation of the informal sector and begin to offer products to suit their needs.

This was even as the experts feared that this will further trigger old age poverty as huge percentages of SMEs are yet to onboard into the plan.

Speaking on the theme, ‘On-Boarding Small and Medium Scale Enterprises into Micro Insurance and Pension Space in Nigeria, Managing Director, Heirs Life Insurance Limited, Mr. Niyi Onifade, noted that MSMEs and SMEs have several risks that insurance operators must look into to provide a cover in order    to    limit old age risk.

According to him, insurers must begin to understand that SMEs are not just the artisans, vulcanisers on the road, but has expanded    to the technology guys, photographs including the well educated who control different kinds of businesses.

Similarly, Chief Executive Officer, Enterprise Risk , Mrs. Funmi Omo, said: “For us as insurance practitioners, there are a lot we should do. We have to start by engaging people at the level of which they are.

“Since we have a lot of educated and non educated people in the informal sector then we have to be diverse in our engagement.”

Chief Executive Officer, Pension Fund Operators Association of Nigeria, (PenOp) Mr. Oguche Agudah lamented the low adoption of the plan while describing it as a national emergency scheme which will be used to save the future of the country.

According to him, operators must begin to look at how to make the scheme suitable, available and how to    incentivize them.