The National Insurance Commission (NAICOM) is trying to rejig its guidelines for microinsurance, according to the insurance commissioner Mr Sunday Thomas.
In an interview with Guardian, he said, “What we had before in the guideline issued about six years ago was the national, state and the unit licensing of microinsurance companies. The amount of capital required for this with respect to some of the sectors is looking unrealistic, and we may have to tinker with it.”
He indicated that the required capital proposed at that time was NGN40m ($104,000) or thereabouts. He said, “It looked adequate at the time it was conceptualised, but obviously it is no longer adequate. The exchange rate was about NGN160 to a dollar and now it is NGN380 to a dollar. This does not seem good to drive the business from a sustainable basis. So we are looking at it.”
Need to do more
Mr Thomas said, “We need to do much more in microinsurance and financial inclusion in general, for us to get the desired penetration. We know that only 1.5m Nigerians have one form of insurance cover or the other.”
Microinsurance is a key area the Commission has identified for growth, to drive the insurance industry.
Insurance industry growth
Referring to the total premiums generated by the overall insurance industry, Mr Thomas said, “You will recollect that in the last three years or so, we have been hovering around NGN350bn to NGN400bn in premiums.”
In terms of premium, the provisional figure for 2019 is about NGN470bn.
Mr Thomas said, “I believe that in the next two years, we must make a remarkable change. If we cannot hit a trillion in the next two years; we should reach half a trillion. We must hit a 50% increase over what it is now. In which case, we should be talking of NGN700bn instead of still dancing around NGN400bn, which is not progress. That is not my vision. Actually, we should be in the realm of NGN1tn in the two years.”