NIC wants insurance policy for SMEs

The National Insurance Commission (NIC), to devise a micro insurance policy to target micro and small scale enterprises (MSMEs) to help mitigate any risks in their operations


The micro insurance, according to the commission, “is to help address the growing nature of the micro insurance segment” while making it possible for low income earners to get insured against business related risks.

The Deputy Commissioner of the NIC, Mr S.N.K. Davo, who disclosed this to the Daily Graphic, said the initiative was part of a collection of new guidelines currently at the draft stage which when adopted by the Ministry of Finance and Economic Planning (MoFEP) would replace the existing one.

Although the existing insurance law does not make specific provision for micro insurance, some insurance companies have developed micro insurance related policies that caters for that segment of their clientele.

While admitting that some insurance companies in the country do have micro insurance policies targeted at the low income earner, Mr Davo said “we have realised that segment of the market is growing and a specific provision should be created to cater for it separately.”

As a result, he said the commission, together with its stakeholders in the insurance industry “are coming up with specific micro insurance provisions to cater for the insurance needs of low income earners in the country.

“That provision if adopted will then be taking care of low income earners such as airtime retailers and other petty traders whose insurance needs are smaller as compared to those of the bigger businesses,” the deputy commissioner added.

Should the provision come into effect, Mr Davo said “these low income earners will have the opportunity to take up insurance policies against unforeseen risks .”

Although the country’s SME sector is witnessing tremendous growth by way of more businesses springing up within that sector, businesses stand the risk of losing their hard earned revenues upon the striking of any business related risk.

The NIC is, however, confident that its new micro insurance policy will address that difficulty facing MSMEs by giving them the opportunity to take up insurance policies to indemnify themselves against such risks.

The commission, he said, was now awaiting the comments of the industry on the new guideline as well as the micro insurance provision to inform its next line of action.

“Should their recommendations and concerns be worthwhile, we will capture it in the proposed guideline before passing it on to the MoFEP and the Attorney General.

“We will, however, ignore those recommendations if we realise they are not worth factoring in,” Dr Davo added.