NAICOM Decries Low Participation Of Insurance Companies In Agri-Business

The National Insurance Commission (NAICOM) has  rated low the willingness of insurance companies to participate in agri-business in the country.

The Director, Authorisation and Policy, NAICOM, Mr Leonard Akah, made this known in an interview with our correspondent.

He said the situation to the misconception that only the Nigerian Agricultural Insurance Corporation (NAIC) had the authority to operate in the sector was wrong.

Akah, however, explained that insurance companies were allowed to provide insurance cover for all aspects of agriculture including crops, livestock, tools, and farm buildings, as long as the farm was not government funded.

“There is this misconception that everything agriculture insurance can only be handled by the Nigerian Agricultural Insurance Corporation (NAIC).

“They feel NAIC has the monopoly; but truly speaking, that is not the true position. Private insurance companies can underwrite any product for agriculture practitioners with the commission’s approval.

“NAICOM, at a point, issued a press release, trying to clarify the true position of the law.

“There are some aspects of agricultural insurance you can underwrite apart from the ones being underwritten by NAIC, because the statutory one being handled by NAIC is actually a no-go area.

“The reason is simple. Government will eventually fund part of the premium and this will not be possible, if the insurance is being done by private insurance.

“NAIC is government-owned, so, it is easier for them to do that,” he said.

He said that if there was a serious claim and the amount was more than 100 per cent of the premium, government would pay the balance.

Akah also identified the inadequate number of existing agriculture insurance specialists in the industry as another factor.

He underscored the need for the training of more agricultural insurance experts.

Akah said the commission had introduced policies such as the micro-insurance product and “Takaful’’, an Islamic insurance product, which insurance companies could use to underwrite insurance cover for clients.

“ We have two types of farmers. Those doing it in small-scale, then the large-scale ones, though very few, but they are the ones that make more impact.

“ The micro-insurance for instance, helps those at the lower level, those peasant ones, those that just cultivate to feed themselves.

“ There is no other source of income for them. So, micro-insurance is targeted at such people.

“ For ‘Takaful’, it is targeted at those big or small-scale farmers, who do not buy into the conventional, because of their religious beliefs.”

Akah, therefore, called on private insurance firms in the country to take advantage of the agriculture sector, adding that NAICOM had put in place a framework to enable its survival.