MICROCAPITAL BRIEF: The Promise of Microinsurance in Nigeria

In a recent article, Akin Ogunbiyi, the managing director of an insurance provider in Nigeria, Mutual Benefits Assurance Plc, spoke about the future for microinsurance in Nigeria. The country currently has a low insurance penetration rate at six percent, however statistics indicate that in comparison to the 35 countries considered to be “low in human development” Nigeria actually has a more developed insurance market. According to Mr Ogunbiyi, Nigeria provides a conducive environment for microinsurance. He pointed to the example of the microfinance industry, which he says has become well developed within Nigeria and commented, “microfinance institutions [MFIs] are well structured and regulated under the national policy on MFI’s of the Central Bank of Nigeria (CBN).” Mr Ogunbiyi observed that the “Nigerian insurance industry has a new and enormous market waiting to be explored.”

Kingsley Obuvie, the president of the Association of Registered Insurance Agents of Nigeria (ARIAN), bemoaned the fact that there have been some failed attempts to go into microinsurance by insurance providers. He said, “a few that may have done so, develop products that are like thrift in nature which might not survive the test of time, I think the industry operators should do a thorough research on micro-insurance products; because that will be another giant step towards growing insurance market in Nigeria.” Mr Obuvie added that in order to be successful in offering microinsurance to the people “more education programs need to be implemented in order for knowledge to be gained with regards to the products that are available in the insurance market”.

By: Christine Chang, Research Associate

About Central Bank of Nigeria (CBN):

Central Bank of Nigeria (CBN) is Nigeria’s central banking authority, established in 1958. Some of the regulatory objectives of CBN as follows: to issue legal tender, to maintain the external reserves of the country, to promote monetary stability and a sound financial environment, and to act as a banker of last resort and financial adviser to the federal government.

Additional Resources:

AllAfrica: Nigeria: Micro-Insurance – Hope of the Hopeless?, April 20, 2010: http://allafrica.com/stories/201004200606.html

MicroCapital Universe: Central Bank of Nigeria (CBN): https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Central+Bank+of+Nigeria+%28CBN%29

Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/

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