• Sunday, December 10, 2023
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‘Insurance sector can generate N60bn premium on micro-insurance’


  With well over 864 microfinance banks (MFBs) and 20 million customer base across the country, the nation’s insurance industry has the capacity to generate a minimum of N60 billion annually if at least each borrowing customer of the banks are insured with N3,000 minimum premium.

This will not only facilitate more access to finance for small and medium scale enterprises (SMEs), poverty alleviation and economic development, but will ensure stability of the microfinance banks in terms of risk management and loan recovery processes.

 Industry stakeholders, who participated at the BusinessDay Roundtable, entitled ‘Improving Insurance Consciousness and Culture through Micro Insurance Scheme’ in Lagos, agreed that the potential of the insurance industry in the area of micro-insurance is huge if only the sector could leverage on available opportunities, while taking experiences from other developed micro-insurance markets like Kenya, India and Bangladesh.

Yemi Soladoye, managing director, Risk-Guard Africa Limited, who presented a paper entitled ‘Role of MFBs in Advancing Micro Insurance Business in Nigeria’, described micro-insurance as insurance for the persons usually with low income and irregular cash flows, often ignored by the mainstream commercial and social insurance schemes.

Soladoye said that from the official report of the National Bureau of Statistics (NBS), which revealed that 112 million Nigerians are poor, is a further indication that the potential of micro-insurance is huge, essentially necessary to take many people in the population out of poverty.

According to him, this class of the society suffers numerous challenges including sickness, accident, dreaded diseases, drought, fire, flood, storm, theft, political violence, religious violence, unforgiving quarrels, death and so require one form of micro-insurance to get out of these troubles or move out of poverty. Other risk exposures include water-borne diseases, absence of medical facilities to diagnose and to treat, ignorance – cultural and religious beliefs, alcoholism; hazardous jobs – snake bite, falling from tree top and social expenses – wedding, funeral, and extended family.

The challenge, Soladoye said, is that insurance companies that presently enjoy huge volumes of premium on corporate accounts and office of the head of service account are not willing to go into micro-insurance because of its small premium characteristics, amidst the huge financial layout and human capital required to reach the mass market