The effective take off of Micro Insurance in Nigeria has been stunted due to lack of public trust in the conventional insurance system. NAICOM is obviously concerned about this and is consequently very careful about approving companies and products. Even if approval is given today the growth and development of Micro insurance will not meet financial industry expectation.
Unlike what obtains in better developed countries, Nigerian government cannot afford to subsidize micro insurance. Subsidy in Agricultural insurance has not significantly helped the growth of that sector as much as expected.
Three years ago i started campaigning for a common delivery mechanism for micro insurance system in Nigeria. This common delivery system need to be
embedded in Nigerian Insurance Law to ensure its
sustainability and collaboration of
all existing structures and units.
This policy will allow NAICOM regulate the subsector more effectively. NAICOM will be able to legislate rules that would affect Premium collection, type of policies issued,Claims management, reinsurance treaties and partnership programs and participation. Standard procedures will be agreed and practiced by all companies. Same policies will be issued with minimal differences. Same standard and policy conditions will be followed. The company will become more confident about micro insurance. The know that notwithstanding the company underwriting their policy the experience and result will be good. No micro insurer will be allowed to jeopardise the interest of the public or that of fellow insurers. .
I have always advocated for this because its the means of taking insurance to the next level in Nigeria, companies that cannot meet common criteria set by NAICON (e.g. maximum of two week for processing any claims payment anywhere in the country) would not be allowed to operate.
This would restore public confidence and give them easy recourse to redress any misdeed of micro insurers. All micro insurance products will carry the same mark of quality approved by NAICOM just like Products carry the NIS quality mark.
The most difficult challenge facing insurance development and growth in Nigeria is lack of public trust. NAICOM must necessarily design Micro Insurance Operations to overcome this challenge.
What do you think about this opinion. I want to hear from you. Lets make some noise until NAICOM do something about this
Have a wonderful week
Rotimi Olukorede
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