Microinsurance must be affordable for low-income earners –Ogunseye


Insurance has the potential to improve the lives of the poor. In this interview with NIKE POPOOLA, the Managing Director, Law Union & Rock Insurance Plc, Mrs. Toyin Ogunseye, speaks on how affordable but innovative policies can help to make it more attractive

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What is the relevance of insurance to the society?

Apart from economic development, insurance is an instrument used effectively to cushion the impact of the risks we are exposed to every day. Even though we may have other survival strategies, insurance responds to the negative effect of insurable perils.

What category of people needs microinsurance?

Microinsurance has the potential to significantly improve the lives of the world’s poorest people and positively impact the development of the informal sector. In fact, one of the instruments being used to bring the poor into conventional financial systems and at the same time improve their wellbeing is financial inclusion. Microinsurance can also be seen as an instrument to actualise the much needed financial inclusion of the population at the bottom of the pyramid. This is because the conventional insurance does not by nature cater for the poor or the low income earners in the society. Law Union has plans to delve into microinsurance. As a matter of fact, we have already setup our microinsurance unit with its product and channel development initiatives. Like microcredit.

How can microinsurance products be made attractive?

The success of microinsurance is predicated on several key characteristics – the product type, scope, use and affordability. Microinsurance products must be demand-driven and designed in a manner that responds directly to the needs and abilities of the low-income market segment. Although microinsurance products differ from market to market, a ‘good microinsurance product’ will generally be simple, usable, accessible, valuable and efficient in meeting the needs of the low- income earner. Our microinsurance products were designed with these attributes in mind. We have plans to introduce new products. We have several products in the pipeline which will be unfolded soon.

What is the relevance of professional indemnity insurance?

Professional indemnity insurance protects you from claims if your client holds you responsible for errors, or the failure of your work to perform as promised in your contract. Anyone who gives to another person advice and or services of a skilful character according to an established discipline might be regarded as a ‘professional’. That means persons other than those in the ‘traditional’ professions, such as doctors and lawyers. Those under this group are computer consultants, advertising agents, and fund managers.

How mandatory is it for professionals to do this?

The policy is being sold by insurance firms and is one of the insurance policies made compulsory under the Market Development and Restructuring Initiative of the National Insurance Commission. Insurance companies are also mandated to provide it for the Health Maintenance Organisations under section 45 of National Health Insurance Act 1999.

What can be done to make the compulsory insurance policies more effective?

There is need to create more awareness. These policies have lots of benefits. Through prompt claims payment and efficient customer service, people will have more confidence and be attracted to the insurance industry.

What should a motorist know about motor insurance?

Motor insurance is purchased for cars, trucks, motorcycles, and other vehicles. Its primary use is to provide financial protection against physical damage and/or bodily injury resulting from collisions and against liability that could also arise therefrom. The specific terms of vehicle insurance vary with legal regulations in each region. To a lesser the degree vehicle insurance may additionally offer financial protection against theft of the vehicle and possibly damage to the vehicle, sustained from things other than collisions.

What should a person who insured his car do immediately an accident happens?

You don’t have to fight with any driver if an accident occurs. Take pictures of the accident and just call your insurer immediately to report the accident. Forward the pictures to your insurer on time so that you can commence processing your claims. You will be asked to fill a claims form.

How easy is it to process motor insurance claims?

It all depends on the type and magnitude of the claim but the most important thing is the submission of proper and correct documentation on the part of the insured.

How can insurance be used to finance long term investment in the country?

Investment risks are not insured by insurance companies, however, assets that are used to generate revenue or erected as investments especially real estate, machinery, even human capital can be insured. This is how insurance can be used to finance long term investments.

How has the guideline on oil & gas business introduced by NAICOM impacted on energy business in the insurance sector?

It has not had any bad effect. It was introduced to help to develop local capacity in the sector; all we need to do is comply with the regulators. Presently, Law Union is among the top 10 oil and gas underwriters in the market

How can insurance help in preserving roads against damage?

The main problem is perception. If the willingness to pay for such insurance is there, it can be done. Therefore, there will be a need to create more awareness as one of the surest ways of changing perception.

Government usually pays premium late on insurance; what advice do you have on how the government can conveniently adjust to ‘No premium no cover regime?’

This can only be done effectively by the regulators.

What processes has Law Union & Rock put in place to make it easy for people to buy insurance?

We have put a number of processes in place like the introduction of various e-payment platforms. We have also gone digital in our marketing activities as you will agree with me that the whole world is going digital now in the market place. This was done in order to effectively reach out to both our potential and existing clients and to make premium payment stress free for them. It will also enable LUR drive awareness and increase visibility. On the e-payment platform we have the POS, Pay Direct (in any bank branch), Quickteller (Interswitch) and Webpay.

What are your expansion plans?

While we intend to expand our market to every corner of the Nigerian market, it is not possible to be physically present in all the states. However, we try to have our foot prints in strategic locations that are viable for business. On the other hand, in terms of product offerings, we have plans to foray into life, takaful, microinsurance and agricultural insurance.

Has the change of ownership of the company improved its operation?

We have tremendously benefited from the wealth of knowledge of the new core investors in various ways too numerous to mention. They have brought in their business knowledge, experience and expertise from their various backgrounds and this is impacting positively on the organisation.

What is your view on corporate social responsibility?

Corporate Social responsibility is good because it is a way of giving back to the society where you are operating in. At the beginning of each year, we make provision for a certain amount of contribution solely for the purpose of giving back to the society and it comes in various forms such as sponsorships and donations

Babatunde Akinsola
Babatunde Akinsolahttps://naija247news.com
Babatunde Akinsola is aNaija247news' Southwest editor. He's based in Lagos and writes on the Yoruba Nation political issues, news and investigative reports

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