The launch of Micro-Insurance cover for informal sector

The Nigeria Insurers Association (NIA) has embarked on closer interaction with the  informal sector to ensure stability and growth for businesses, its Director-General, Sunday Thomas, has said.

He made this known while speaking at the conference/fair in Lagos. The event had market women, traders, artisans and non-governmental organisations (NGO) in attendance.

He said that insurance is a viable tool for mitigating losses among the less privileged.

He noted that the conference/fair is their first ever on Micro Insurance subsector and also their first deliberate effort to reach out to the informal sector of our economy.

He stressed that the insurance industry regulator, the National Insurance Commission (NAICOM) has sets out the framework, road map, market and regulatory strategic directions for the operation of micro insurance in Nigeria.

He said: “This conference is put together by the Micro Insurance committee of the Nigeria’s Insurers Association. Our aim is to bring together all stakeholders concerned with micro insurance in Nigeria with the overall objective of ensuring that both the demand side and the supply side of micro insurance are in sync together.

“It is also meant to create awareness for our member’s micro insurance products for informal sector of the economy. It is common knowledge that insurance culture is very low among the informal sector and it would take deliberate effort like this to win the confidence of this sector.

“The country diagnostic study says less than 1 per cent of the adult population in Nigeria have access to a voluntary insurance policy.  Nigeria is among the least countries in terms of insurance contribution to GDP which is around 0.72 per cent.”

He said the sector is regarded as “a grossly untapped opportunity” because we have not yet appealed to the informal sector which constitute over 80 per cent of the Nigerian population.

“For the NIA, the obvious way forward is to through closer interaction with this sector, intensive capacity building and greater expertise in micro insurance, providing unique micro insurance services, development of people friendly products, and improved innovative distributive system.”

“Micro insurance is targeted at the informal sector and the low income masses. It is the most veritable too for mitigating losses from unexpected accidents and disasters.  Low income groups are invariably exposed to innumerable risks. Micro insurance works on the phenomenon of risk transfer mechanism characterized by low premiums and low coverage limits.

“As an industry we will continually seek for opportunities to court the friendship of this sector. For us the future of our industry most probably lies in what we do with this sector and how they the sector accepts our products and services. We are optimistic that the relationship we are starting today will continue to blossom and get stronger”, he noted.

Source: Guardian News