New health insurance law opens growth window for insurers, investors
The National Health Insurance Authority (NHIA) Act 2021 recently signed into law by President Muhammadu Buhari is seen as a new growth window that will attract investors into insurance and health management sectors.
With plan for a ‘Vulnerable Group Fund’ to include Basic Health Care Provision Fund due to the NHIA, Health Insurance Levy, Special Intervention Fund, phone tax and any investment proceeds, donations and gifts to the Authority, and targeting over 80 million vulnerable Nigerian, the opportunity for growth is huge, analysts have said.
Obasi Ngwuta, director-general of West Africa Business School, described it as an opportunity for new investors, life and health insurance companies in Nigeria to grow and expand their frontiers.
Insurers are encouraged to take advantage of the new law to invest and grow their businesses, Ngwuta said.
The managing director of a health maintenance organisation, who spoke on condition of anonymity, said: “We need time to review it (the new law) so that we can actually understand where to partner.”
According to the MD, the Act is meant to increase participation and better service for enrollees. “So, we are positive it will be in the interest of the whole industry.”
The NHIA Act says the authority, among other things, shall ensure the implementation and utilisation of the basic healthcare provision fund as required under the National Health Act and any other guidelines as approved by the minister under the law.
“It shall grant accreditation and re-accreditation to health maintenance organisations (HMOs), mutual health associations, third party administrators and healthcare facilities and monitor performance.”
The COVID-19 pandemic brought about a new wave of interest among insurance companies veering into the health sector either coming with wholesale health insurance subsidiaries or partnering with established HMOs to provide additional services that increase benefits for enrollees.
The insurers say the HMOs have an organised enrollee customer base that provides an opportunity to increase healthcare benefits and other personalised insurance services that enhance the standard of living of the citizens.
Akin Ogunbiyi, chairman of Mutual Benefits Assurance plc, said, “HMOs have an organised clientele base that we can partner with to enhance their healthcare benefits, and at the same time sell other insurance products.”
According to Ogunbiyi, Mutual Benefits Life Assurance is currently partnering with a HMO to enable its enrollees to enjoy extended benefits from conventional insurance products.
“HMOs pull about N100 billion premium annually, and this is just from a small percentage of the population; so the potential of that industry is huge, and we are happy to partner with them,” he said.
Over the last three years, the country witnessed the launch and formal unveiling of Leadway Health, a subsidiary of Leadway Assurance Company Limited; and Consolidated Hallmark HMO, a subsidiary of Consolidated Hallmark Insurance plc.
These are in addition to existing insurance subsidiary HMOs including AXA Mansard Health and Royal Exchange HMO, among others.
Tokunbo Alli, CEO of Leadway Health, had said the introduction of Leadway Health would serve as a disruption and an exceptional redefinition of the delivery of reliable and affordable health care to the public.
Alli said: “With the introduction of Leadway Health Limited, our range of solutions would help bridge the gap in providing quality, accessible, and affordable health services to
“As of 2018, there were about 57 HMOs in Nigeria, according to Statista, yet nearly 97 per cent of people surveyed in Nigeria did not have any health insurance. Only about three per cent of individuals had health insurance, mainly on employer-based coverage.”