Major incursion into the retail space, which is expected to deepen insurance penetration at the grass roots will soon be seen in the nation’s insurance industry.
This is coming on the heels of major players taking up license to operate core micro insurance subsidiaries, rather than as a window.
When the pronouncement for fresh license was made by the National Insurance Commission (NAICOM) over a year ago, not many conventional insurers showed interest, as most applications came from outsiders who wanted to have stake in the industry, no matter how small.
But with Consolidated Hallmark Insurance (CHI) Plc, a major player in the industry coming up with the license, the landscape will no doubt have a new look.
Obinna Ekezie, chairman of CHI PLc made the disclosure when addressing shareholders during the Company’s Extra Ordinary General Meeting to approve additional capital raise for the Company held in Lagos.
He said that the micro insurance subsidiary is scheduled to commence full operations in the first quarter of the year 2020.
Ekezie had noted that this approval is considered a demonstration of confidence by NAICOM in the capacity of CHI Plc to successfully operate a Micro Life Assurance business, having successfully delivered on its General Insurance business line.
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Commenting on the development, Eddie Efekoha, managing director/CEO of CHI Plc who doubles as the current president of the Chartered Insurance Institute of Nigeria (CIIN), said the operational license would further help in the effort to deepen the retail segment of the insurance market.
“We are set to take off”, he said, “having put in place a robust network of retail and agency team that have contributed and continue to contribute immensely to the growth of the parent company. The future is in retail business and micro insurance if we are to reach the mass of the Nigerian people with quality, reliable and affordable insurance solutions, he said.
According to him, this low-income segment has remained largely untapped and we are ready to give it our best shot”.
According to Efekoha, the business office for the microinsurance company has since been acquired and ready for occupation by the new team. The business will leverage on technology and strategic partnerships to give its customers an exciting insurance services experience.
Micro insurance is defined as the type of insurance developed for the low-income segment of the population. Such insurance is expected to be low valued with simple features, easy to understand and whose delivery/distribution channels must be efficient.
The Insurance Industry Regulator, National Insurance Commission (NAICOM) had in 2018 released a set of Guidelines for Micro Insurance Operation in Nigeria. The document clearly set out various steps for registration of micro insurance operators, and their modus operandi.
In order to ensure a more extensive reach amongst the population especially at the grassroot level, the regulator classified the operators into three categories – unit (local) state and national operators. Minimum Capital Base for Micro Insurance Operators was pegged at N15m for Life operators at the Unit level and N25m for General Business operators while N200m and N400m minimum Capital Base was fixed for Life and General Business operators respectively at the national level. These are part of efforts by NAICOM to boost insurance penetration through as many Micro Insurers as possible that are expected to operate in the over 700 local government areas of the country. With the ostensibly affordable capital requirement, -there is an envisaged departure from the current concentration of underwriters in a few urban areas with focus on big ticket transactions and move into the hinterlands.
The maximum sum insured for any policy being underwritten by the micro insurance operators is pegged at N2m while time limit for payment of fully documented claims is 48 hours, according to the guidelines.
With the approval by NAICOM to commence operations, CHI Micro Insurance Limited is set to deepen the insurance penetration by ensuring that those who had never considered themselves able to afford an insurance cover can now do so.The insurance premium can be as low as N1,000 to upwards of N5,000. The products will be tailored to meet the needs of the customers.
Consolidated Hallmark Insurance Plc, the parent company, has already established itself as a company that delivers on its promises and pay claims promptly. This same high quality customer fulfillment will be extended through its new CHI Micro Insurance Limited, life assurance subsidiary.
