Nigeria’s microinsurance space gets new investors

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NAICOM, Bancassurance, Microfinance banks

The National Insurance Commission (NAICOM) has said there are about five new investors who have expressed interest in the country’s microinsurance space. This was announced by NAICOM’s Deputy Commissioner, Technical, Sunday Thomas.

Thomas said the commission had got some applications from interested investors, adding that two of the investors may soon commence operations.

Bua group

“We had applications from about five companies and two of them are at the verge of being given licences. These will be the first two sets of companies that met the requirements.” – Thomas

NAICOM had, last year, commence the implementation of its revised guidelines for microinsurance operations in Nigeria.

What the revised guidelines say

The guidelines were introduced as part of the financial inclusion strategy to stimulate growth in the insurance subsector especially the retail end of the market and drive insurance penetration.

The guideline, which came to effect on January 1, 2018, established a uniform set of rules, regulations, and standards for the conduct of microinsurance business. The high points from the revised guideline are from Section 2, 3 and 4 as against the previous guidelines released in 2013.

The guidelines also state that on statutory deposit, a microinsurer shall maintain with the Central Bank of Nigeria (CBN) a statutory deposit of 10 per cent of the minimum capital requirement.

As regards liquidity status, a Unit Microinsurer shall, in respect of its insurance business in Nigeria, maintain at all times a 50 per cent Liquidity Margin being the excess of the value of its admissible current assets in Nigeria over its current liabilities in Nigeria.

A State Microinsurer shall, in respect of its insurance business in Nigeria, maintain at all times a 35% Liquidity Margin being the excess of the value of its admissible current assets in Nigeria over its current liabilities in Nigeria, while a National Microinsurer shall, in respect of its insurance business in Nigeria, maintain at all times a 25 per cent liquidity margin being the excess of the value of its admissible current assets in Nigeria over its current liabilities in Nigeria.

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