The EFInA Access to Financial Services in Nigeria 2010 survey, highlighted that only 0.8 million adults (1% of the adult population) has insurance. In terms of risks experienced in the household, 44.1 million adults have experienced the death of a relative; 42.4 million adults have experienced serious illness of a family member; 18.0 million adults have experienced theft of a household property, andÂ 8.3 million adults have been involved in a vehicle accident. The top mechanisms for coping with these adverse experiences is doing nothing and using their savings.
The Innovation Forum discussed how insurance companies can better serve the low income population with insurance products which are relevant, appropriate and affordable to meet their needs; and how the benefits of having insurance should be communicated to the low income population.
The keynote speaker at the Forum was Jeremy Leach, Head of Micro-insurance and Divisional Director, Hollard Insurance Group, (the largest independent and privately owned insurance group in South Africa); other guest speakers included Christine Hougaard, Engagement Manager and Mia de Vos, Analyst, Centre for Financial Regulation and Inclusion (CENFRI), South Africa. They discussed how insurance companies have developed microinsurance products for the low income mass market in South Africa and Hollardâ€™s experience in rolling out innovative microinsurance products in Africa.
Speaking at the event, Israel Muchena Technical Director, Hollard Mozambique on behalf of the keynote speaker, Jeremy Leach said, â€śIn South Africa, 45% of the population have some form of insurance, for example funeral cover has grown at more than 10% per annum since 2003. He further stated that, â€śWhilst challenges exist, there are also considerable opportunities to grow the Nigerian insurance market but new models andÂ innovative thinking would be required to overcome the relatively lowÂ usage of insurance products."
Christine Hougaard defined microinsurance as insurance products accessed by the low income market. She stated that, â€śMicroinsurance can help to minimize the impact on household incomes, especially for the low income population, when adverse events such as death, illness and accidents occur. However, for the microinsurance market to flourish in Nigeria, significant customer education would have to be undertaken by both the regulator NAICOM and insurance companies.â€ť
Ms. Modupe Ladipo, Chief Executive Officer, EFInA, presented key findings on the insurance sector from the EFInA Access to Financial Services in Nigeria 2010 survey. She concluded the Forum by stating that, â€śAccess to insurance services can provide a safety net for the poorest segments of society, when they experience adverse events. When our survey revealed that the penetration of insurance products in Nigeria was only 1% of the adult population, we decided to host a Forum to debate and discuss the challenges, opportunities and innovation required in product design to successfully implement a microinsurance market in Nigeria."