The Nigeria Insurers Association (NIA) has said that the obvious way to grow insurance industry and make it contribute meaningfully to the GDP of the economy was for operators to establish closer interaction with informal sector operators, develop intensive capacity building and greater expertise in micro insurance operations .
NIA also advised its members to provide unique micro insurance services, develop people friendly products, and improve innovative distributive system.
NIA chairman Mr. Godwin Wiggle, who stated this at the maiden micro insurance fair organised by the association in Lagos said micro insurance, which was targeted at the informal sector and the low income masses was the most veritable tool for mitigating losses from unexpected accidents and disasters.
He observed that low income groups are invariably exposed to innumerable risks, noting that micro insurance works on the phenomenon of risk transfer mechanism characterised 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 mentored.
He encouraged the informal sector operators to interact with insurers during and after the conference, and share their experiences with them to enable the insurers know their challenges and areas they need insurance intervention.
He added: “This experience will help us develop better products and services for you,” said the NIA chairman.
According to him, the insurance industry regulator, National Insurance Commission (NAICOM) has set out the framework, road map, market and regulatory strategic directions for the operation of micro insurance in Nigeria.
Furthermore, he said, the conference was put together by the Micro Insurance committee of the association as a follow up to that decision, adding that the aim was 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 common knowledge that insurance culture is very low among the informal sector and it would take delibrate effort like this to win the confidence of this sector. The country diagnostic study says less than 1% of the adult population in Nigeria has access to a (voluntary) insurance policy. Nigeria is among the least countries in terms of insurance contribution to GDP which is around 0.72%. The Nigerian insurance sector is regarded as a grossly untapped opportunity because we have not yet appealed to the informal sector which constitute over 80% of our population”, Wiggle stated.