The South West has taken the lead as the major in measuring the goal of National Insurance Commission, of achieving the target of 40% adult population penetration.
This lead coming after the CBN launched the National Financial Inclusion Strategy 2012, fits into the framework for increasing the formal use of financial services by the adult population to 80% by 2020 from the level of 36% in 2012.
Taken a cue from the CBN launch, the insurance industry target was set at achieving 40% penetration amongst adult population by the year 2020 from (from 1% in 2020).
The match to cover the target has led to the license of five Takaful operators, four of them full-pledged and one, a window operation licence to existing insurance company. The microinsurance operators licenced are four, two approved and two in the weigh of approval in principle.
Two of the companies, Goxi Microinsurance Company Limited and Cassava Microinsurance Company Limited are in Lagos with state licence category, while Sagamu Microinsurance Limited situated in Sagamu, has unit category licence. The fourth, CHI Microinsurance Limited, right in Lagos, has the national tag, is expected to carry risks from across the country.
To enable these companies set for the grassroots function optimally, the Commission’s range of coordinated interventions would provide enabling environment and frame work for the excluded and low income population to participate and benefit from insurances, through the development of legal and regulatory frame works on Takaful and Microfinance (the Commission issued 2 guidelines in 2013). The regulator also provides the policy wordings for the policies on microinsurance and handover same to companies to offer policyholders for clearness and common front.
The interventions also include liberalisation of insurance intermediaries: referral agencies and new insurance agents; and at the same time, define and implement insurance literacy programmes.
Also contained in the presentation on “Insurance Development in Nigeria: The Financial Inclusion Option” Zubairu S Darazo, Head, Takaful Insurance, NAICOM, the Commission has pledged to enforce quick settlement of claims and sanctions for infractions (establishment of a dedicated department, complaints bureau in the Commission).
Darazo, also mentioned the Commission’ obligation to provide incentives for insurance companies to develop microinsurance products, Takaful insurance and index-based insurance products to serve low-income/rural individuals.
In 2012, the estimates made in The Nigerian Financial Inclusion Strategy, showed that the closest real mark sustained was the figures for 2010, which was the base year. The target achieved for that year was 1%, the projected target for 2015 was 21% and 40% the landing peak for 2020.
However, hitting the 40% mark as the minimum achievement for 2020 currently off the mark. The market share for the combined performance of Takaful and Microfinance as at 31st December, 2019, was less than 1%. Besides, the penetration rate of the insurance market stays at 3%.
The combined performance of the excluded, low income and rural dwellers for 2019 was N2.35bn, Takaful, N2bn; Microinsurance N350m.