NAICOM Director Decries Low Insurance Cover For Agribusinesses

The National Insurance Commission (NAICOM) last Tuesday described as unacceptable the unwillingness of insurance companies to provide insurance cover for agribusinesses in the country.

NAICOM’s Director, Authorisation and Policy, Mr Leonard Akah, made this known in an interview with newsmen in Abuja.

He attributed the low penetration of insurance companies into the agriculture sector to the misconception that only the Nigerian Agricultural Insurance Corporation (NAIC) had the authority to provide cover for the sector.

Akah said insurance companies were at liberty to provide insurance cover for all aspects of agriculture, including crops cultivation, livestock farming, agricultural machinery, and farm buildings as long as the farm was not government-funded.

“There is this misconception which the Nigerian insurance companies have presently. And that misconception is that everything about agriculture insurance can only be handled by the Nigerian Agricultural Insurance Corporation (NAIC).

“NAICOM at a point issued a press release, trying to clarify the true position of the law, that is to say to the industry, look you have an opportunity.

“That there are some aspects of agric insurance you can write apart from the ones written by NAIC, because the statutory one from NAIC is actually a no go area.

“According to him, 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 since NAIC is government owned; so it is easier for them to do that.

“And there is also another peculiarity with the NAIC act. That peculiarity is that, If there is a serious claim, and the claim amount is more than 100 per cent of the premium, government will pay the balance.

“All that, you cannot get under the conventional arrangement.

“So we had to explain all that. And following that, we started seeing private insurance coming to apply for approval to write some agric product. As it speak, about two companies have gotten our approval to write on agric products’’.

Akah said one the reasons for the low participation of insurance companies in the agriculture sector was the inadequate number of existing agriculture insurance specialists in the industry.

He spoke of the need for the training of more insurance experts to take advantage of the abundant opportunities in agriculture insurance.