Low Insurance Penetration; Micro Insurance to the Rescue

The low penetration of insurance in Nigeria and the African sub region appears ready for a sustainable change. Feelers emanating from the African Insurance Organization indicate that the adoption of micro insurance has been identified as the veritable tool to achieve this penetration. The adoption which formed part of the organization’s resolution at its 37th Annual General Meeting held recently in Banjul , capital of Gambia . According to the players, micro insurance presented opportunities for the African insurance industry to reach out to the poor and vulnerable, who form the majority of the population of the continent.
According to the insurance chiefs, a well managed system would not only result in long-term profitability but also involve the delivery of corporate social responsibility to the poor and vulnerable segments of the societies, and would go a long way at enhancing their individual corporate and industry image. In a communique issued at the end of the meeting, micro insurance products demand innovativeness in both product design and channels of distribution and premium collection. The organizers agreed that Africa represent a big boost to the growth of insurance market and noted that effective and efficient management of human and financial resources were critical factors to the continued growth and development of the industry. They stressed that insurance companies must take steps to put in place human resource management policies that would ensure the recruitment of the right personnel into the industry.
The conference which hosted insurance gurus from the sub region, including Nigeria , mandated insurance companies operating in the clime to work on human resource development. It also charged them to make efforts that would embrace every segment of the market having in mind corporate governance responsibilities which are crucial to the sustainable development and profitability of companies.
Highlights of the communiqué include; That systems must be put in place for periodic assessment of performance of staff and board of directors preferably by independent external performance auditors. That the survival of the insurance industry in Africa, especially after the disastrous effects of the financial crisis, hinges on the rebuilding of trust and confidence among consumers and no effort should be spared to achieve this. That aside from the various things that we have to do to improve our internal operational efficiency and effectiveness, we must do all it takes to attract and manage consumer trust and confidence by acting in responsible ways regarding what consumers and our other key stakeholders consider fundamental and important to our business. That our various national associations must take the lead in developing and implementing policies and programmes that will continuously enhance our professionalism, ensuring that we compete on professionalism, innovation of products and customer service. Finally, that we must actively engage and continuously seek healthy collaboration and cooperation with regulators to ensure a conducive regulatory framework that will promote and encourage a vibrant and viable industry in Africa .
The operators also called for a unified code of conduct as a vehicle to advancing the frontiers of insurance while calling for sanctions against those who break the rules.