In a deliberate effort to harness the estimated N60 billion annual premium opportunity currently lying dormant in micro insurance market in Nigeria, Nigeria is joining other seven countries in Africa in considering special policies for micro-insurance in order to speed up its development.
The other countries are Ethiopia, Egypt, Ghana, Kenya, Uganda, South Africa and Zambia.
These countries are currently experimenting on special and people oriented policies that will drive the micro insurance market in their countries.
An insurance expert, Professor Festus Moboluwaji Epetimehin, at the 6th Inaugural Lecture of Joseph Ayo Babalola University, Osun State, said some African countries are already making efforts to reel out measures and policies that will speed up the wide acceptance of micro-insurance.
Epetimehin in a paper titled: ‘Small But Big: Micro-Insurance and the Reduction of Social Risk of Poverty’ at said: “Currently, some African governments, such as those of Nigeria, Ethiopia, Egypt, Ghana, Kenya, Uganda, South Africa and Zambia, are in the process of considering special policies and regulatory frameworks to spur micro-insurance market development.”
The Commissioner for Insurance, Alhaji Mohammed Kari, had a recent visit to the Corporate Head office of THISDAY Newspapers in Lagos, revealed plans to scale micro insurance operators in Nigeria into local, state, regional and national operators to ensure adequate coverage of Nigerians in insurance services provision.
He said each scale would be required to provide only the capital that suits his area of coverage, a major shift from what is currently obtained in capitalisation of micro insurance operation by the commission.
But Epetimehin urged African countries to come up with policies that will ensure mass spread of insurance services to the people at the grass root in place of current trend which only recognises city dwellers.
He also urged African governments to learn from policy approaches at the global level and design their own to suit their markets.
“Across the globe, many governments particularly finance ministries, financial sector regulators and insurance supervisors have recognised that expanding the insurance sector to include broader population segments can spur economic development and welfare.”
“The creation of a financial sector characterised by competition, market efficiency and outreach is on the development agenda of numerous governments in Africa. Enabling policies and regulations, along with effective supervision, facilitate the growth of private-sector involvement and enhance the distribution and quality of micro-insurance, he added.”
According to him, South Africa is so far the only African country that has taken definite steps to develop a special policy approach that has helped to improve access to insurance while a good number of governments are yet to take steps towards integrating the poor into the formal insurance sector.
Some lessons that have been learned in most of those countries, Epetimehin said, are worth analysing in more detail to help provide a framework under which policymakers and insurance regulators can design their country-specific approaches.
He said the role of governments in insurance provision has undergone a fundamental change in the past decade adding that for years, governments were direct providers of insurance in many developing and emerging market countries.
“Government in the continent should provide enabling environment, which is “the set of conditions that promote a sustainable trajectory of market development.
“The conditions with which micro-insurance can thrive better, are factors that impact the operation of the market in a country, including the regulatory environment, infrastructure, and availability of information”, he suggested.