Underwriters skeptical of micro insurance model

Underwriters seem to be skeptical of acquiring micro insurance licenses, as the National Insurance Commission (NAICOM) says majority of the applications it had received were from outside the mainstream Insurance providers.

The Commissioner for Insurance, Mohammed Kari, who disclosed this at the just concluded National Insurance Conference in Abuja, said NAICOM has concluded the process to license two micro insurance operators with four other applications near conclusion.

He noted that in a bid to deepen insurance penetration, NAICOM developed and launched the Micro Insurance and Takaful operational guidelines which allowed insurance companies to offer relevant products through “the window” models of operation.

He added that after the commission had gathered some experience, it reviewed the guidelines and upscaled the operations to specialist and dedicated licensing to entice specialist operators from within and without the Insurance industry. Operators who seemed not to be comfortable with the micro-insurance guidelines, are seeking a workable model that would enable them key into the regulator’s vision.

“We are engaging the National Insurance Commission to find workable model, and that has been included in the insurance industry development Plan, which KPMG is helping the industry to harmomnise,” a member of the Nigerian Insurers Association (NIA), said.

An industry source said, NAICOM may have to engage operators again, because operating as micro insurance window is not working and not serving the purpose of the project. We have so many local governments that have no sign of insurance companies at all, and this is what micro insurance scheme was meant to address.

NAICOM had on release of the Revised Micro-insurance Guidelines which became effective 1st January, 2018 stated that non-life conventional insurers operating Micro-insurance as a window operation are given till June 2018 to wind up this operation, while the life operators has December 2018 as the deadline to do same.

The Revised Micro-insurance Guidelines further stated that, “No person shall commence or carry on any class of Micro-insurance business without being registered or authorized by the Commission.

According to the Commission, efforts to make existing insurance companies key into micro insurance products and reach the grassroot was not successful, so the new direction was strategically decided to drive penetration and increase access to insurance services.

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