In an effort to further boost insurance usage as well as encourage micro insurers in Nigeria, the National Insurance Commission (NAICOM), has issued approval to Consolidated Hallmark Insurance (CHI Plc) to establish another subsidiary, tagged ‘CHI Micro Insurance Limited’.
The approval is considered a demonstration of confidence by NAICOM in the capacity of Consolidated Hallmark Insurance Plc to successfully operate a Micro Life Assurance business, having successfully delivered on its General Insurance business line.
According to the company, ‘CHI Micro Insurance Limited’ will have its business focus on micro life assurance since the parent company has been operating a General Insurance business line.
Speaking, Managing Director, CHI Plc, Eddie Efekoha, said the operational license would further help in the effort to deepen the retail segment of the insurance market. He explained that the future is in retail business and micro insurance, adding that these two business lines are needed if the general population in Nigeria is to be attracted by the sector.
“We are set to take off with a robust network of retail and agency teams that have contributed and continue to contribute immensely to the growth of the parent company. The future is in retail business and micro-insurance if we are to reach the mass of the Nigerian people with quality, reliable and affordable insurance solutions. This low-income segment has remained largely untapped and we are ready to give it our best shot,” he said.
What You Should Know About Micro Insurance:
Microinsurance is created for the low-income segment of the population. It is a key insurance package that underwriting firms believe will help increase the penetration of insurance in the Nigerian population, especially the low-income class who shy away from insurance.
Also, Micro Insurance is the method NAICOM intends to deploy in a bid to boost insurance usage in Nigeria. To achieve this, Micro Insurance is made to be more affordable than other insurance packages.
According to NAICOM, its long-term plan is to have Micro Insurers operating in over 700 local government areas of the country, thereby bridging the gap between urban and rural areas, since insurance firms operate mostly in urban areas.
The minimum capital base for microinsurance operators was pegged at N15million for Life operators at the Unit level, and N25 million for General Business operators, while N200 million and N400 million minimum Capital Base was fixed for Life and General Business operators at the national level. The insurance premium can be as low as N1,000 to upwards of N5,000.