• Friday, March 29, 2024
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Insurance penetration drive up as NAICOM grants licence to Casava microinsurance

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The Nigerian insurance industry’s efforts to deepen insurance penetration by capturing the low-income population with affordable products have received a boost with the approval to Casava Microinsurance to operate as state microinsurance company only in Lagos.
Casava, according to BusinessDay investigations, is owned by the Pedro family of Lagos which parades politicians, oil moguls and financial services sector experts.
This licensing brings to two the number of standalone microinsurance companies licensed by the National Insurance Commission (NAICOM), Goxi Microinsurance Company having been licensed in February 2019.
Both Goxi and Casava Microinsurance are to operate as state composite microinsurance companies, transacting life and general microinsurance business in Lagos only.
NAICOM had disclosed at the beginning of 2019 that it plans to increase to five or six the number of microinsurance firms by the end of the year.
Insurance penetration in Nigeria is one of the least in Africa, falling behind South Africa, Kenya, and Egypt, and currently stands at less than 0.1 percent, while the industry’s contribution to the gross domestic product is put at 0.4 percent.
Sunday Thomas, deputy commissioner for insurance, technical, told BusinessDay over the phone that NAICOM was eager to see the microinsurance companies take off to drive grassroots insurance.
“Certainly, we must lift something off the ground, and we are working towards it seriously,” Thomas assured.
Thomas said that this approval was in a bid to increase insurance penetration and acceptance in the country, saying that it would also complement the commission’s efforts on insurance penetration.
 
Ayodele Iyun, an insurance practitioner in a presentation titled  ‘Micro-Insurance: Nigeria’s Untapped Insurance Market,’ said low insurance awareness and inaccessibility to insurance services especially by the low-income earners and the poor had over the time been identified as the major factors responsible for Nigeria’s low insurance rate.
 
He said there was a general perception amongst most low- income persons in Nigeria that insurance is only meant for the wealthy that can afford it, and this belief, he noted, had left majority of the people in this class that accounted for the larger percentage of country’s population ‘’ uninsured” and vulnerable to numerous perils.
 Insurance products designed for this group of people are going to be cheaper, affordable (lower premiums) with lots of flexibility, to attract them to taking up insurance covers.
 
Iyun further stated that with the recent level of success achieved in developed countries and some African countries in the area of micro-insurance, this provides the Nigeria insurance industry the opportunity to explore the potentials inherent in the micro-insurance market which has been left untapped over a long period of time.
Micro-insurance is intended to protect the poor in the society, particularly the low-income earners mostly earning their living in the informal sector.
Low income persons live in risky environments and are exposed to numerous perils.
Severe weather can wipe out a family’s crop and leave them nothing to eat until the next harvest. The death of a breadwinner can force children out of school and into labour market.
Micro-insurance is intended to help low income families cope with these and other risks, experts said.