Consolidated Hallmark Insurance (CHI Plc) has received approval from the National Insurance Commission (NAICOM) to operate CHI Micro Insurance Limited, a new micro life assurance subsidiary.
With the approval by NAICOM, the Micro Insurance Life subsidiary is thus set for full operations.
In a statement in Lagos, the Managing Director, Eddie Efekoha, who doubles as the President of the Chartered Insurance Institute of Nigeria (CIIN), said the approval is a demonstration of confidence by NAICOM in CHI Plc to operate a Micro Life Assurance business, having delivered on its General Insurance business line.
He stated that the licence would further help in the effort to deepen the retail segment of the insurance market.
He said: “We are set to take off having put in place a robust network of retail and agency team that have contributed and continue to contribute immensely to the growth of the parent company. The future is in retail business and micro insurance if we are to reach the mass of the Nigerian people with quality, reliable and affordable insurance solutions. This low-income segment has remained largely untapped and we are ready to give it our best shot.
“The business office for the microinsurance company has since been acquired and ready for occupation by the new team. The business will leverage on technology and strategic partnerships to give its customers an exciting insurance services experience. Micro insurance is defined as the type of insurance developed for the low-income segment of the population. Such insurance is expected to be low valued with simple features, easy to understand and whose delivery/distribution channels must be efficient. The Insurance Industry Regulator, National Insurance Commission (NAICOM) had in 2018 released a set of Guidelines for Micro Insurance Operation in Nigeria. The document clearly set out various steps for registration of micro insurance operators, and their modus operandi.
“To ensure a more extensive reach the population especially at the grassroots level, the regulator classified the operators into three categories – unit (local) state and national operators. Minimum Capital Base for Micro Insurance Operators was pegged at N15million for Life operators at the Unit level and N25million for General Business operators while N200million and N400million minimum Capital Base was fixed for Life and General Business operators at the national level. These are part of efforts by NAICOM to boost insurance penetration through as many Micro Insurers as possible that are expected to operate in the over 700 local government areas of the country. With the ostensibly affordable capital requirement, there is an envisaged departure from the current concentration of underwriters in a few urban areas with focus on big ticket transactions and move into the hinterlands.”
He noted that the maximum sum insured for any policy being underwritten by the micro insurance operators is pegged at N2 million while time limit for payment of fully documented claims is 48 hours, according to the guidelines.
He added that with the approval by NAICOM to begin operations, CHI Micro Insurance is set to deepen the insurance penetration by ensuring that those who had never considered themselves able to afford an insurance cover can now do so. The insurance premium can be as low as N1,000 to upwards of N5,000. The products will be tailored to meet the needs of the customers.
CHI Plc, the parent company, has already established itself as a company that delivers on its promises and pay claims promptly. This same high quality customer fulfilment will be extended through its new CHI Micro Insurance Limited, life assurance subsidiary, he added.