Consolidated Hallmark Insurance (CHI) has taken steps to increase its footprint in the insurance market in Nigeria after it received a nod from the National Insurance Commission (NAICOM) to establish another subsidiary.
The new subsidiary will have its business focus on micro life assurance. The name of the new insurance firm is CHI Micro Insurance Limited. The parent company has been operating a General Insurance business line.
The future is micro insurance: Managing Director, Eddie Efekoha, said the future is in retail business and micro insurance. He explained that these two business lines are needed if the general population in Nigeria are to be attracted by the sector.
“We are set to take off with a robust network of retail and agency team 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.”
About the new business line: Micro insurance is created for the low-income segment of the population. It is a key insurance package underwriting firms believe could help increase the penetration of insurance in the Nigerian population, especially the low-income class that shy away from insurance.
It is a method NAICOM intends to deploy to boost insurance usage within the country; that’s why it’s more affordable than other insurance packages. The long-term plan is to have Micro Insurers operating in over 700 local government areas of the country. Currently, insurance firms operate mostly in urban areas, so micro insurance will bridge the gap between urban and rural 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.
Expansion to create jobs: It was learnt that all that is needed to begin operation has been put in place, with the company just left with recruitment of personnel for the office. With the unemployment level projected to increase this year, the spin-off micro-insurance business of CHI is a welcome development.
“The business office for the micro insurance company has since been acquired and ready for occupation by the new team. The business will leverage on technology and strategic partnerships to give its customers an exciting insurance services experience.”
According to Nigeria Employers’ Consultative Association (NECA), the rate of unemployment in Nigeria may rise to 33.5 per cent this year, from the current rate pegged at 23.1%.