The National Insurance Commission (NAICOM) is set to issue draft guidelines for new channels of insurance distribution in the country as part of ongoing efforts to deepen insurance penetration in Nigeria.
Insurance penetration to GDP in Nigeria is currently at less than 0.4 percent, according to 2014 figures, putting Nigeria 10th in Africa behind South Africa, Mauritius, Namibia, Morocco, Tunisia, Angola, Algeria, Kenya and Egypt. South Africa is highest with 14 percent and followed by Namibia 7.2 percent.
To achieve this, the Commission has created new distribution agencies to be known as “Referral Partners/Agents”. This channel will entails integrating and involving many organisations to be partners/agents of insurance companies in the distribution of insurance products across the country.
Rasaaq Salami, head, corporate affairs in NAICOM, said in a statement on Wednesday that the initiative was expected to create opportunities for individuals and regulated corporate entities to play a vital role in the insurance distribution chain to access and reach the largely underserved majority of the Nigerian population without being exposed to any liability.
The draft guidelines, to ensure seamless operation of this initiative, are ready for exposure after which it shall be issued as an operational guideline, Salami said.
Meanwhile, the Commission will be meeting with relevant regulatory agencies and professional bodies to discuss the modus operandi and benefits inherent in this new initiative.
Inadequate insurance distribution channels have been roundly identified as one of the major challenges of deepening insurance penetration in Nigeria, and the Commission believes that expanding the channels of distribution will go a long way in bridging the gap of insurance awareness and penetration in Nigeria.
Also, when implemented, the new initiative will not only achieve the desired increase in insurance penetration, but would contribute to the Federal Government’s drive to create employment and wealth in the economy.
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