NAICOM tasks insurance firms to invest in agric, retail insurance

The Commissioner for Insurance Mr. Fola Daniel tasked the insurance firms at the 2nd Business Day Insurance Roundtable held in Lagos.
Daniel frowned at the practice where some underwriters or brokers bribe government officials and other stakeholders to have monopoly on accounts, warning that those caught will face stiff sanctions.
He said: “If the insurance industry is able to explore the retail market, take advantage of the huge opportunities that exist in micro-insurance, takaful and agricultural insurances, the issue of low access to insurance in the country might be a thing of the past in no distant future.”
He said that NAICOM welcomed such initiatives, reiterating call for such arrangements to be made within the confines of sound insurance principle and practice.
He added: “Operators should not in their exuberance to deepen penetration of insurance enter into exclusivity arrangements that prohibit other operators from fairly competing for certain businesses or operating in certain geographical locations. This is unacceptable.
“It is NAICOM’s view that to protect the under-served population and promote financial inclusiveness, insurance companies should develop products that meet the needs of the low-income earners with very small premium that provides a pay-out within a few days if a shock event occurs. It has worked in countries like India and Malaysia. Back home in Africa, it is working in Ghana, Kenya and South Africa.”
Micro-insurance basically ensures insurance services are provided to the poor, low income and non-salary earners and it covers the life, health and property insurance.
Agricultural insurance seeks to protect farmers from the effects of drought, flood, windstorm, rainstorm, fire, pests and diseases as well as the risk of death and injury to livestock and animals due to accident, disease, fire, lightening, storm and flood. It is usually extended to cover the lives and health of farmers as well as their equipments and property.
Takaful insurance is a platform for the protection of lives and property based on risk-sharing in line with the principles and practice of Islam as against conventional insurance. It also covers general risks, health and family (life) plans for Muslim communities.
It complies with Shari’a principles of compensation and shared responsibilities in the community and whereas policy holders are joint investors with insurers (takaful operator), who acts as manager for policyholders, they share in both profit and loss made by the operator.