Expert Says Less than 10m People Have Insurance Worldwide

An insurance expert has lamented the poor penetration of insurance in the world, warning that if the current rate at deepening insurance penetration is not changed, there are indications that only a minimal impact will be made in the lives of the poor in our society, particularly in Africa…
Prince M. Ikupolati, head of Mission, West African Insurance Institute, , who made this known, explained that the number of people at the poor level who subscribe to insurance in Nigeria and Africa is still low, a situation he described as worrisome.
“Currently, out of the N4billion people on earth who lives on less than $2per day, fewer than 10million have access to insurance, that is,. 2.5percent of the world population have access to insurance”.
He explained that there has been no systematic effort aimed mapping out the distribution of microinsurance, stressing that an analysis of alternative financial institutions in the world in 2004 showed that there are approximately 665million client accounts at over 3,000 institutions serving poor people than those served by commercial banks.
He stated that of this accounts, 120 million were with institutions that normally practice microfinance but not including micro-insurance.
He added that micro insurance products and services are conspicuously absent in the diverse historical roots of this movement which included postal savings banks, stake agricultural and development banks, co-operatives and credit unions and specialized rural banks.
The insurance expert explained there are yet no studies to indicate the distribution of informal microfinance organizations like ROSCA.  He said this and other ‘informal’ associations help the poor manage costs like weddings, funerals and sickness.
Ikupolati explained that “generally all over the world, as weather-related natural disasters increase, so does the vulnerability of the poor.”  He stressed that “we “need to build inclusive financial sectors for impoverished communities to help them better cope with risks”.
He added that in Nigeria, thousand of disasters have happened but they were not accorded recognition because they happened to the poor.  He called for concrete actions that will help liberate the rural populace in West Africa can be liberated from abject poverty.
He called on operators to tailor their needs to meet the specific needs and preferences of the poor.  This he said is the only way the “current haphazard risk management approach can be given a serious bite.
He said “many countries such as Singapore, Argentina, Canada and Sweden, have well-established and large co-operative insurers owned and controlled jointly by a number of cooperative businesses and organization.”
A summary of major Micro-insurance products show that Nigeria ranks at the lowest rung of the ladder among some countries of the world.  He said this is unlike other countries like United Kingdom France, Germany, Finland, New Zealand, South Africa etc, where the are successful and well-run mutual benefits insurers owned by individual policy holders.