NAICOM’s nod for micro-insurance to boost retail segment
Insurance is a product of risk transfer where a business enterprise assumes and shoulders the uncertainty of another business in return for the payment of a premium by the policyholders. But Micro-Insurance (Micro-Insur) would be assuming a bigger role in deepening the retail strategy.
To address risks, the underprivileged have customarily used risk pooling through informal insurance or risk-sharing arrangements.
The local insurance industry is largely small, leaving a wide portion of the population unserved by any formal insurance company.
The development and sustainability of micro insurance within the country may come in hand in supporting the insurance industry stability since this will take into account the small groups.
Given the size and potential of the untapped market and lack of mass information, the insurers have to place most of the risk with reinsurers.
In a quest to deepen the retail segment of the insurance market in Nigeria, the National Insurance Commission (NAICOM) granted Consolidated Hallmark Insurance Plc (CHI) approval-in-principle to operate a new Micro Life Assurance subsidiary, CHI Micro Insurance Limited.
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.
This approval by the industry regulator to allow CHI successfully operate a Micro Life Assurance business followed the successful delivering of its General Insurance business line.
The Managing Director/Chief Executive Officer CHI Plc, Mr Eddie Efekoha, who is also 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, 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. This low-income segment has remained largely untapped and we are ready to give it our best shot,” he said.
According to Efekoha, the business office for the micro-insurance 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.
This positive development is coming on the heels of a recent disclosure by the company’s Chairman, Obinna Ekezie, to shareholders during the Extra Ordinary General Meeting (EGM) held to approve additional capital raise for the company.
He said the Micro Insurance subsidiary was scheduled to commence full operations in the first quarter of the year 2020.
He had told the shareholders who gathered to approve the additional capital raise plan of the company that “the CHI Microinsurance Limited is on the verge of being granted an operational license by NAICOM, after having met all the regulatory requirements and paid the statutory deposit to the Central Bank of Nigeria.”
The regulator said that the approval was considered after the demonstration of confidence in the capacity of CHI to successfully operate a Micro Life Assurance business, having successfully delivered on its General Insurance business line.