Micro insurance products to boom

Insurance companies can now create, market and sell their own micro insurance products with the introduction of a new micro insurance regime by the National Insurance Commission (NIC).

The new regime will guide insurance companies to sell micro insurance products, contribute to the development of the micro-insurance sector and ensure that policy holders are adequately protected.

Isaac Yaw Boabeng, Head of Marketing, Research and External Affairs at NIC, in an interview with CITY & BUSINESS GUIDE said the move by NIC is aimed at penetrating the uninsured sector of the populace.

“Insurance penetration is very low. It is between 1.5 to 1.6 percent as of now. So, we hope the introduction of the micro insurance regime will encourage high patronage,” he said.

He also observed that until the regime was introduced, insurance companies that wanted to introduce micro insurance product informed the commission and sought approval before they sold micro insurance products.

“However, with this regime, otherwise known as ‘file and use’, “you only file a product with the commission after which you study the performance of the product over a four-week period. If it does well, you keep it but if it doesn’t, you create another product and introduce it onto the market.”

He said that the insurance companies are at liberty to charge premiums they consider appropriate but was quick to add that it should be affordable so that targeted clients will be able to pay.

“If there are claims after the products have been launched, claims should be paid within a short reasonable period of 10 days within which they should pay the claim. It is a special treatment we are giving to the people in the low income sector,” he said.

The new regime has provisions such as directing insurance companies to present the product in simple terms and exclusions, among others.