Roughly 100 000 MTN and Airtel network subscribers have bought microinsurance products every month since the launch of a new platform in October last year. This is according to Leo Lekan, deputy director of authorisation and policy at Nigeria’s National Insurance Commission (NAICOM).
Lekan stated that the number of new microinsurance policies sold to telecoms subscribers since October of 2013 now stands at 600 000. Since the release of its microinsurance guidelines at the start of 2013, NAICOM has made the sector a key focus in a drive to increase insurance penetration in the market, while ensuring that set minimum standards protect the consumer and establishing the general features of micro-insurance products.
Airtel currently offers an airtime-based microinsurance product called Padi4Life in partnership with FBN Insurance, while MTN is offering its own insurance service with Mansard Insurance called MTN Y’ello Cover.
Insurance penetration in the Nigerian market has been relatively low to date, according to a recent industry report by pan-African credit rating agency, Agusto & Co. The report revealed that the insurance industry’s gross premium income had increased by 19 per cent over the previous year but the insurance penetration ratio was still below one per cent, far below the continental average at 3.5 per cent.
The agency predicts that increased microinsurance offerings in the country may start to encourage deeper market penetration for the sector in general. These recent figures are yet another demonstration of the power and potential for growth presented through innovative technology-based distribution channels.