The National Insurance Commission (NAICOM) says micro and takaful insurances contribute less than one per cent of the premium generated in the industry.
The Head, Takaful Insurance of NAICOM, Mr Zubairu Darazo, announced this at a seminar for insurance journalists in Uyo on Saturday.
In a lecture titled: `Insurance Development in Nigeria: The Financial Inclusion Option’, Darazo said that takaful and micro insurance would take care of the insurance needs of low income earners.
He regretted the low contribution of this micro policy, saying that lack of understanding of the model of the insurance among insurance companies was a bane for its low penetration.
He said the commission had registered about four takaful and micro insurance companies each, adding that it would register more when necessary.
Darazo said the registration was to achieve the 40 per cent financial inclusion target in the insurance industry.
He noted that as at December 2019, the premium paid for takaful insurance stood at just N2 billion while the micro insurance was N350 million.
He also said that claims paid under the takaful insurance stood at for the N540 million while that of micro insurance was N75 million.
According to him, the commission had planned programmes to promote these categories of insurance.
“If you compare the market share of takaful and micro insurance and the premium generation for the industry, it is still less than one per cent.
“We have a lot of potentials in these insurance,’’ he said.
He listed the registered takaful insurance companies to include Cornerstone, Salam Takaful Insurance Ltd, Noor Takaful Nigeria and Jaiz Takaful Plc.
Takaful entails members of a group based on mutual agreement, contributing money into a pool of funds to be utilised in mutually guaranteeing members against loss or damage.
It provides the perfect alternative to any segment of the populace opposed to the modus operandi of the conventional insurance to safeguard losses.
Micro insurance, on the other hand, was developed for low income population with low valued policies.