Following the release of guidelines on micro insurance by the industry regulator, the National Insurance Commission (NAICOM) ten companies have indicated serious intention to obtain licences to pursue the initiative.
This development was confirmed by the Deputy Director Authorisation and Policy, NAICOM, Mr. Leo Akah.
Micro-insurance policies, according to the commission, covers little risks and therefore, exclude special risks like motor insurance (except tricycles and motorcycles), professional indemnity and other pecuniary risks with sums insured higher than N1m.
The commission also clarified that all third party liability risks with sums assured above N1m are excluded from the micro-insurance business.
Akah told our correspondent that the commission had concluded plans to commence what he described as staged approval for those that have applied.
He said unlike in the past when approvals were granted on a one-off basis, the current process would be thorough to ensure that only ‘fit and proper persons’ get the micro-insurance licence.
He explained that the inability of some of the companies that applied for the micro insurance license to develop products that would meet the requirements of the policy, was a major for the delay in getting approval.
Akah said for any company to get approval, its products must be simple, affordable and valuable.
He added that it was ironic that most people who applied for licence still saw micro-insurance from the point of view of conventional insurance adding that the commission would ensure that all the strict guidelines in the policy would be complied with before approvals.
He said, “We have a list of the requirements for registering either as full-fledged or as a window operation and the commission will within the first few weeks in the month of April be releasing the stages of approval to the general public.
“We have many applications and where the problems lie is the products, because being a new line of business, most people are still looking at micro insurance with the eye of a conventional insurance.
“Every micro insurance product must be simple, valuable and affordable in nature. And not until we see and are convinced, any product that is being presented and does not meet these requirements, we would be reluctant to approve their products.
“As I speak to you, nobody has been registered to carry out micro-insurance business in Nigeria. We have 10 applications and we will be meeting with the promoters to know who they are, and we want to know whether they are fit and proper persons. This process is not going to be a one-off thing.”
Meanwhile, the President of the Micro-insurance Centre, London, Mr Michael McCord, has said Nigeria can gain from other countries’ experiences on micro-insurance through research and development.
He said, “Micro-insurance is an important tool for sustainable development in Nigeria. It is a huge potential business because there are about 100 million potential clients in Nigeria.”
McCord lamented that most insurers operating in the country have not discovered the business side of micro-insurance, noting that there was still need for capacity development.