By Cynthia Alo

THE implementation of micro insurance across the country is being threatened by apathy and lack of awareness on the part of Small and Medium Enterprises (SME) operators.

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Insurance

Insurance Vanguard investigations revealed that SME operators are indisposed towards micro insurance due to some factors including lack of awareness and hash operating environment.

In January, National Insurance Commission, NAICOM, signalled the commencement of micro insurance with the introduction of the guideline for the new policy. The guideline defines micro insurance as, “insurance developed for low income populations, low valued policies, micro and small scale enterprises, MSMEs, provided by licensed institutions, run in accordance with generally accepted insurance principles, and funded by premiums”.

According to NAICOM, “micro-insurance products are insurance products that are designed to be appropriate for the low income market, low valued policies, micro and small scale enterprises in relation to cost, terms, coverage, and delivery mechanism.”

But almost a year after the guideline was introduced, Insurance Vanguard investigation revealed that SME operators are yet to be aware about micro insurance and how it is supposed to work.

Speaking to Insurance Vanguard, Mr. Henry Iwueze, a clothe importer said that he cannot embrace micro insurance in spite of the benefits of insurance generally.

Iwueze stated: “It would be difficult for me to buy micro insurance because of high cost of living in the country. My priority is focused on survival and providing daily food, shelter and the welfare of my family. The economic system does not encourage SMEs to consider other investments for futuristic purpose order than immediate satisfaction”.

Another importer and boutique dealer, Mr. Daniel Okafor, attributed low insurance acceptance to lack of integrity in the Nigerian insurance system. “Frankly, I am aware but have no confidence in our insurance companies. I have friends who bought some form of insurance but suffered delay in the claims payment”.

Meanwhile, Mr. Sunday Nnam, who deals in building materials told  Insurance Vanguard that high import duty placed on imported products frustrate acceptance of insurance packages.

He noted that importing into Nigeria can be difficult as one tends to spend huge amount clearing and transporting goods. “I import doors and other building materials and the money I spend on shipping them is a burden not to talk of buying an insurance product. Some of the insurance companies visit here but honestly I don’t trust them”, he added.

However, some insurers, while reacting to the  issues raised by the SME operators, argued that micro insurance have untapped potentials and such the industry has been aggressive in ensuring full acceptance by SMEs by engaging in media and publicity both online and offline.

Head, Corporate Communication at Leadway Assurance, Olubunmi Adeleye, told Insurance Vanguard that structures such as trainings, workshops, seminars, have been used to create appropriate awareness and publicity about the benefits of micro insurance to SMEs.

Adeleye said, “There is the need to distribute micro insurance products and services through technological driven platforms to ensure deeper and faster penetration. Partnership with telecommunications companies and mobile money service providers should be explored and leveraged upon. More awareness on the benefits of micro insurance needs to be created by all stakeholders”.

Also speaking on the issue, Head, Non-life business at AIICO insurance, Mr. Taofeek Ayeni, said that a regulation on claims handling, payment and publishing of claims paid by practitioners for public consumption will aid awareness and trust from the public.

Also speaking, Onyeka Onwueringo, of First Diamond Brokers Limited, said that in order to aggressively engage SMEs to micro-insurance, insurers must engage continuously in market research to understand the needs of their clients and ensure the use of interesting medium to create a better awareness.