Tuesday, August 3, 2021
insurance

Celebrating MSME Day, Insurance Dares

Quite easily, insurance companies and practitioners as well as analysts discuss the next big thing for the industry as microinsurance, retail insurance, inclusive insurance, personal lines, Takaful and most recently, Insurtech and digital insurance. One could say, so many names for one agenda, which is to get the Micro, Small and Medium Enterprises (MSMEs) into the insurance net.



In Nigeria, for nearly five years, we have read and heard about the 41 million MSMEs that are contributing to the growth and development of our economy, whilst remaining the largest employers of labour. So, it keeps amazing me that the two sectors – insurance and MSMEs are not yet married.



In my attempt to find out why both have not met, I discovered that:

They have not been introduced. History has yet to reveal the meetings between the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and National Insurance Commission (NAICOM), Nigeria Insurers Association (NIA) or Nigerian Council of Registered Insurance Brokers (NCRIB) despite the resolve of the latter to grow the market through the insurance of micro enterprises and small businesses;
There is no law that compels MSMEs to have insurance policies. Insurance operators are used to providing insurance cover for entities that are within the bracket of those compelled to do insurance, and are challenged to show value that would attract MSMEs. A few attempts to invite and engage MSMEs have been seen recently by a couple of insurers and we will be watching how they win into the years ahead;
With the recent Certification Program for Business Development Services Providers (BDSPs) by SMEDAN, there will be the problem of not accepting the Certification of Insurance Agents by NAICOM, even if the conversation starts today. Given the responsibilities of BDSPs, which gives them priority access to MSMEs, it will be interesting to see how insurers will reach their new targets, especially with the competition brought by the banks.


The insurance sector needs to engage the MSMEs and offer them solutions to the problems they have with managing their risks.



Now is also a good time for MSMEs to look for the right channel to transfer the risks they cannot keep.



In this season, no one is living with risks they can transfer.



Happy MSME Day!

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