The revised micro insurance guideline recently issued by the National Insurance Commission (NAICOM) has opened doors of opportunities for retired and retiring insurance professionals, experts have said.
According to them, the categorization of the micro insurance business would enable the professionals, especially managing directors operate comfortably and contribute more to the industry and economy.
The Managing Director/Chief Executive Officer, Ben Ujoatuonu, said: “I think it is an opportunity, because the new guideline has categorized capitalization for that class of business and anyone who is interested to play within his capacity. If the exiting chief executive officers, find an opportunity there, I think it will deepen penetration for the industry and that will also be good.”
He said the categorization by NAICOM will give rooms for high echelon players, middle and low, to play effectively.
“With the categorization, wherever you think you can find a level playing ground for yourself you focus in that area and play.
‘’I believe that there are a lot of money in the unorganized sector of the economy. If we can device a means of reaching them, you will be amazed that even those playing at the lower level of that guideline, will rake in a lot of money within a short time and the claims exposure will not be as much as we experience now in the corporate and government are,” he added.
The Chairman in Council, Association of Registered Insurance Agents of Nigeria (ARIAN) Gbadebo Olameru, said the guideline is one of the best legacy the Commissioner for Insurance Mohammed Kari has made for the industry. He said the guideline has provided a platform for Managing Directors that had managed big organizations to come down and manage smaller firms that will over time grow into big companies. He urged professionals to take advantage of the initiative to better their lots and increase insurance penetration in the country.
It is pertinent to note that NAICOM in the guideline on Micro insurance operations classified the business into Unit having N40 million capital base, State, N100 million and National, N600 million.
It said the guideline is parts of the financial inclusion strategy to stimulate growth in the sector especially the retail end of the market, drive insurance penetration and service the lower income earners who hitherto have been excluded from insurance.
According to guideline for a National Insurer, who seek composite micro insurance license, is expected to be capitalized to the tune of N600 million, while N400 million minimum capital base is needed from a General micro insurance and N200 million for a Life operations
It noted that national operators are allowed to have presence in at least six states within the three geopolitical zones of the federation. For a State Micro insurer, the minimum capital base is pegged at NI00 million, broken into N60 million for general and N40 million for life operators. The regulator also expects such underwriter to operate only in one State of federation, with at least three branches or office locations, each in a different Local Government Area.
A Unit Micro insurer investor, must be capitalized to the tune of N40 million, N25milliom for general business and N15 million for life, with operation in one location within a local community. The regulator, has therefore made it mandatory for these micro insurance outfits to make themselves visible and must be seen to be serving the low income earners grassroots.
The new move, is aimed at increasing insurance penetration from 0.6 per cent it is currently to over two per cent in the near future, as well as increase the annual premium income of insurance industry to N1 trillion by Year 2020.