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Understanding the Concept of Micro Insurance

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Fola Daniel, commissioner for Insurance
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The importance of micro insurance in bailing Nigerian out of its low insurance esteem cannot be over estimated. In recent times, the practice has been receiving tremendous support among operators. With the integration of insurance businesses in Africa, especially as the country makes in-road into African countries, experts have opined that the time to embrace micro insurance is now.
According to Dr. Mike Ikupolati, president of West Africa insurance Association, insurance over the world,  has been found to be a major player in the socio-economic development of societies and more recently in strive towards poverty eradication in our societies.  Insurance in West Africa cannot therefore be an exemption.  Given its rightful place in this poverty alleviation crusade, Insurance can help tremendously in uprooting completely the causes and effects of poverty in our societies.
To provide protection against risks, the poor have in the past developed informal and non-insurance mechanisms such as diversifying income sources, building assets by saving money, stocking food and investing in housing and healthcare, strengthening social networks, participating in reciprocal borrowing and lending systems, welfare associations and other informal group-based insurance systems. Some of them are enrolling in formal insurance or pension schemes or other formal social security systems.  It also involves managing money well by controlling consumption and maintaining access to multiple sources of credit selling assets, exchanging gifts, cash transfer, diversifying crops etc,.
In West Africa, people had tried “OSUSU” as a means of providing for unforeseen contingencies.  Unfortunately these have proved inadequate and have instead retarded economic growth and social mobility.  Many elderly people live in poverty due to limited access to pension plans and saving facilities.  These are the specialties of micro-insurance products today.  Since loan facilities are increasingly impossible to access by the poor, the micro-insurance principles take cognizance of the situation of the poor and hence created products and services that are at the reach of the poor.
With this privileged information at the back of our minds, let us attempt to have a better understanding of micro insurance.
Micro insurance is a financial arrangement to protect low-income people against specific perils in exchange for regular premium payments proportionate to the likelihood and cost of the risk involved (Craig Churchill, 2006).  This definition Churchill adds does not refer to the size of the risk-carrier; some are small and even informal while others may be very large companies.
The scope of risk, the risk themselves are by no means ‘micro’ to the households that experience them.
The delivery channel can be done through variety of different channels including small community-based schemes, credit chains or other types of micro finance institutions, but also by enormous multinational insurance companies.
Micro insurance is synonymous to community-based financing arrangements (Peter et al, 2002), including community health funds, mutual health organization, rural health insurance, revolving drugs funds and community involvement in user-free management.  Most community financing schemes have evolved in the context of severe economic constraints, political instability and lack of good governance.  The common future within all is the active involvement of the community in revenue collection, pooling resource allocation and frequent service provision.
Insurance functions on the concept of risk pooling and likewise regardless of its small unit size and its activities at the level of single community, so does micro insurance.  Micro insurance links multiple small units into layer structure, creating networks that enhance both insurance functions through broad risk pools and support structures for improved governance i.e. training data bank, research facilities, access to reinsurance, etc.  This mechanism is concerned as an autonomous enterprise, independent of permanent external financial lifelines and its main objective is to pool both risks and resources of whole groups for the purpose of providing financial protection to all members against the financial consequences of mutually determined risks.
Transactions are low-cost and reflect members’ willingness to pay.
Clients are essentially low-net-worth but not necessarily uniformly low and
communities are involved in the important phases of the process such as package, design and rationing of benefits.
The essential role of the network of micro insurance units is over and above what each can do when operating as a stand-alone entity.
And finally that cooperation among stakeholders is the key to successful provision of micro insurance to the poor, who constitute the teaming population in West African; mainly illiterates and are of low-income group who could hardly afford the prices of the conventional insurance products, currently sold by commercial insurers.
Small benefits amount are clearly defined and simple rules and their restrictions are
easily accessible, encompassing claims documents requirements and fast payment of benefits.
Also of value is the need for specially adapted client education, affordable premiums payable in small amounts as exclusive as possible.
To thread successfully in this unpopular road, the insurance practitioners must be facing or are ready to face some obvious challenges. The key principles of innovation for this market with enormous potentials are;
conventional wisdom in delivery of products and services has to be challenged even as
significant investment in customer education is imperative.
Volume is also a basis for returns on investment especially as technology has to be combined with the existing infrastructure.
It is paramount that for micro insurance to be successful,government huge investment in guaranteeing confidence in the sector by the private sector is paramount.
The challenges of micro insurance in West Africa are many.  It is vital to know that our local conditions are unfavourable premium income is low, administrative costs are relatively high and infrastructure for insurance support is lacking.  These explain why the commercial insurers in West Africa have not taken more interest in this market.  Reaching the poor people, many of whom are illiterates and making a living in the informal economy is difficult.  And benefit of insurance is often misinterpreted since most of them do not understand why the premiums are not refunded if no claim is made.
These challenges are compounded by the following;
No mechanism to systematically reach the informal workers and the workers themselves are largely unorganized in most cases, especially in cases where there is no employer contribution.
The poor may not be able to afford the full cost of running a conventional insurance due to insufficient government resources to cover recurring expenses and
inadequate infrastructure to provide appropriate services.
Micro-insurance as social security therefore,
fills the gap to provide coverage to the excluded and responds to an urgent need in the absence of formal social security.
Ikupolati had stressed that it also creates delivery mechanisms to extend government programmes to the informal economy while striving to integrate the informal and the formal.
The institutions or set of institutions implementing micro-insurance are commonly referred to as a micro insurance scheme.
There are government policies and programmes to reduce poverty and vulnerability by diminishing people’s exposure to risk and enhancing their capacity to protect themselves but in West Africa, these programmes are not particularly effective.The main obstacles being no mechanisms to systematically reach informal worker as well as the absence of employer contributions as earlier stated.
Micro-insurance is not a new invention.  The industrial life assurance sold at factory gates in American cities in the early 1900s made the then Metropolitan life insurance company, the largest industrial life assurance as the forerunner of what today is known as commercial micro-insurance.
It was simply a response to a market demand managed in a manner that made the products appropriate for the market.  The delivery channels, agents at each factory gates, were specific to this market.  The premiums reflected the particular risks of the factory worker market.  Coverage responded to the workers specific needs, premium collection on pay day as the workers exited the factories were efficient.  In general, industrial life assurance was then a response to a market that provided access to quality insurance products for low income workers and access to a large market for the insurers.
Today the need to meet the demand of the poor is becoming increasingly significant as majority of the population in West Africa especially live in the rural areas where access to micro-finance has been limited and hence insurance provisions are at low ebbs.  Consequently, the provision of insurance products to micro-finance clients is becoming increasingly common and popular.  Much has been learnt over the past decade about how to design products to better meet the needs of the poor.
The provision of any financial services to the poor must start with an understanding of client demand.
What are the financial needs of the poor?
In developing economics and particularly in the rural areas, many activities that would be classified in the developed world as financial are not monetized, that is, money is not used to carry them out.  Almost by definition, poor people have very little money.  But circumstances often arise in their lives in which they need money or the things money can buy.
In Stuart Rutherford’s recent book The Poor and Their Money, he cites several types of needs
Lifecycle Needs:  such as weddings, funerals, childbirth, education, home building, widowhood, old age.
Personal emergencies such as sickness, injury, unemployment, theft, harassment or death as well as disaster such as fires, floods, cyclones and man-made events like war or bulldozing of dwellings.
The work of Rutherfod, Wright and others had caused practitioners to reconsider a key aspect of the micro-credit paradigm: that poor people get out of poverty by borrowing, building micro-enterprises and increasing their income.  The new paradigm places more attention on the efforts of poor people to reduce their much vulnerability by keeping more of what they earn and building up their assets.
While they need loans, they may find if as useful to borrow for consumption as for micro-enterprises.
A safe, flexible place to save money and withdraw it when needed is also essential for managing household and family risk.
Poor people over the years have found creative and often collaborative ways to meet these needs, primarily through creating and exchanging different forms of non-cash value.  Hence, the idea of micro insurance cannot be totally strange to them.
Therefore, micro insurance can be offered in many areas among them; health risks, injury or death as well as property risks such as agriculture risks such as low yield, theft travel risks etc,.  Individuals in the low-income bracket have needs and preferences that may vary.  Micro insurance product design must therefore reflect this heterogeneity and premium payments should also be tailored to the customers’ cash flow position.

 


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FG to Abolish JSS-SSS Separation Policy after 20m Pupils Drop Out

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Federal government has announced plans to end the separation between Junior Secondary School (JSS) and Senior Secondary School (SSS) as part of efforts to improve school retention and reduce the high number of pupils dropping out before completing secondary education.

FG to Abolish JSS-SSS Separation Policy after 20m Pupils Drop Out

Tunji Alausa, minister of Education

Tunji Alausa, minister of Education, announced the proposal on Tuesday during the inauguration of the Ministerial Implementation and Monitoring Committee of the Universal Basic Education Commission (UBEC) in Abuja.

Alausa said the existing “disarticulation policy,” which requires junior and senior secondary schools to operate independently with separate principals, management structures and facilities, has failed to achieve its intended objectives and has instead worsened access to education.

According to him, the Federal Government will present a proposal to abolish the policy at the next meeting of the National Council on Education (NCE), the country’s highest education policymaking body.

“We have 20 million dropouts from primary school to JSS. Where are those students?” the minister queried.

“We also found we have 80,000 public primary schools and only about 15,000 junior secondary schools. That’s a one-to-eight ratio.”

He explained that the mismatch between the number of primary and junior secondary schools has created severe bottlenecks in the education system, leading to overcrowded classrooms at the junior secondary level while many senior secondary school facilities remain underutilised.

Alausa cited Kaduna and several northern states as examples where the policy has contributed to poor transition rates between basic and secondary education.

“This disarticulation policy has failed. We will phase it out. We can’t be creating positions because we want to create director-level appointments for people while we harm our education system. It’s about doing what is best for every Nigerian child,” he said.

The minister said the proposed reform forms part of broader efforts by the Tinubu administration to improve access to education, increase retention rates and enhance learning outcomes across the country.

He acknowledged previous shortcomings in tackling the out-of-school children crisis but expressed confidence that the current administration would reverse the trend.

“This government will not fail. We are fixing it,” Alausa declared.

At the ceremony, the minister also inaugurated the UBEC Ministerial Implementation and Monitoring Committee, chaired by Prof. Rashid Aderinoye, to supervise the execution of UBEC-funded Smart Schools, Bilingual Schools and Alternative Schools nationwide.

He said the committee had been tasked with ensuring that the projects are completed, handed over to state governments and opened for teaching and learning.

Although UBEC has invested in hundreds of Smart Schools and related educational projects across the country, Alausa lamented that many remain abandoned, unfinished or yet to admit pupils, describing the situation as an unacceptable waste of public resources.

He stressed that improving education requires more than constructing schools, insisting that completed facilities must become fully operational and accessible to learners.

 

 


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FG Mulls National Skills Database to Tackle Unemployment

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Federal government has said that it plans to establish a National Skills Database as part of efforts to reduce unemployment, address the growing mismatch between available skills and industry needs, and strengthen workforce planning through data-driven policies.

FG Mulls National Skills Database to Tackle Unemployment

The proposed database, to be developed under a Nigerian Skills Observatory, is expected to provide real-time information on the supply and demand of skills across sectors, enabling better job matching, improved policy formulation and targeted investments.

The plan was unveiled at the second National Skills and Industry Alignment Roundtable Series held in Abuja with the theme, “The Role of Data in Job Creation, Coordination and Linkages.”

Delivering the keynote address, Yemi Kale, group chief economist and managing director of Research and Trade Intelligence, Afreximbank, said Nigeria’s labour market challenge was no longer the absence of data but the inability to convert existing information into actionable intelligence.

“The challenge for us as a nation is not one of data accumulation. It is one of data integration and intelligence,” Kale said.

He explained that although vast amounts of information on education, employment, wages and skills development already exist across government agencies, educational institutions and the private sector, the data remains fragmented, making effective labour market planning difficult.

“Data tells you what exists. Intelligence tells you what is happening, what is likely to happen next and what actions should be taken,” he said.

Kale lamented that while Nigeria produces thousands of graduates annually, employers in critical sectors continue to struggle to recruit qualified workers, even as millions of Nigerians remain unemployed or underemployed.

“The problem is that employers are searching, workers are searching, policymakers are searching and investors are searching independently rather than collectively. Opportunities that should be visible remain hidden because the information needed to connect them is fragmented,” he said.

According to him, the disconnect has created structural inefficiencies that discourage investment, suppress productivity and prevent Nigeria from fully leveraging its youthful population.

He added that countries that successfully transformed their economies deliberately aligned education, skills development and workforce planning with the needs of industry.

Kale urged Nigeria to view its youthful population as an economic asset by ensuring young people acquire skills demanded by modern industries.

Speaking on the proposed National Skills Database, Rimam Nuhu, special assistant to the President on Workforce Development,  said the platform would serve as the foundation of the Nigerian Skills Observatory.

“At the most foundational level, the Skills Observatory is to create a database on the demand and supply of skills,” Nuhu said.

He explained that the National Council on Skills, chaired by Vice President Kashim Shettima, would rely on data generated by the observatory to formulate evidence-based policies on workforce development.

“Skills development is an input for job creation. We have a market where there are a lot of skills mismatches. Understanding exactly where those shortages exist will help us plan better and improve workforce planning.

“Ultimately, that contributes to a more productive economy,” he added.

Nuhu acknowledged ongoing debates over whether Nigeria is facing an actual shortage of skilled workers or merely a mismatch between available skills and labour market demand, stressing that the database would provide the evidence needed to guide interventions.

Earlier, Akubo Adegbe, senior special assistant to the President on Coordination and Delivery, said the roundtable was convened to tackle the fragmentation of labour market information across government institutions and the private sector.

He noted that despite huge volumes of workforce data being generated daily, the lack of coordination often leaves policymakers without a comprehensive understanding of labour market realities.

“If our first Roundtable challenged us to better align skills with industry, this second Roundtable challenges us to better align information with action,” Adegbe said.

Also speaking, Massimo De Luca, head of Cooperation at the European Union Delegation to Nigeria and ECOWAS,  said the EU would continue supporting Nigeria’s efforts to build a labour market capable of meeting investors’ needs.

“We have a shortage of skilled labour when it comes to big investment projects. On the other hand, we have a lot of untapped talent that is not adequately recognised.

“Those are realities that investors take into account,” De Luca said.

He commended the Office of the Vice President for leading reforms aimed at strengthening Nigeria’s skills development ecosystem.

The Federal Government’s plan comes amid persistent unemployment and skills mismatch in Nigeria, where many graduates remain jobless despite employers reporting shortages of qualified workers in critical sectors.

The National Skills Database will serve as the foundation of the proposed Nigerian Skills Observatory, an initiative designed to provide real-time labour market data to guide workforce planning, skills development and evidence-based job creation policies.


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First Lady inaugurates IT academy, clinic, launches food bank programme in Jigawa

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Nigeria’s First Lady, Senator Oluremi Tinubu, on Monday commissioned the President Bola Ahmed Tinubu Academy, alongside a modern clinic and dialysis centre named in her honour, describing the projects as “clear evidence of the government’s commitment to improving infrastructure, expanding access to quality healthcare, and investing in the future of the young.”

First Lady inaugurates IT academy, clinic, launches food bank programme in Jigawa

The First Lady of the Federal Republic of Nigeria, Senator Oluremi Tinubu, cuts the ceremonial ribbon to officially commission the Senator Oluremi Tinubu Clinic and Dialysis Centre in Hadejia Local Government Area of Jigawa State. She was joined by the Governor of Jigawa State, Malam Umar A. Namadi, and the Director General of the National Information Technology Development Agency (NITDA), during the commissioning ceremony.

The commissioning took place in Hadejia, Jigawa State, where Senator Tinubu emphasised that the state-of-the-art clinic would bring “relief and hope to many patients and their families in Hadejia, neighbouring communities, and beyond.”

She added that the academy represents President Tinubu’s dedication to human capital development and educational excellence, which secures “a better tomorrow” for Nigeria’s children.

In addition to the health and education projects, Senator Tinubu also launched the National Food Bank Programme, a deliberate and sustainable response to food insecurity and malnutrition among vulnerable households.

The initiative is designed to ensure that children under six, pregnant women, and lactating mothers have access to nutritious food, directly advancing President Tinubu’s Renewed Hope Agenda on food security and improved health outcomes.

The programme is being implemented through a strategic partnership between the Office of the First Lady, the Federal Ministry of Health and Social Welfare, the National Primary Health Care Development Agency, and the Bank of Agriculture.

According to Senator Tinubu, the initiative will “build a stronger and more prosperous Nigeria” by safeguarding the health and future of its most vulnerable citizens.

The clinic and dialysis centre were built and fully equipped by FutureMap Foundation and eHealth Africa, in honour of the First Lady’s passion for uplifting underserved communities and vulnerable people.

The President Bola Ahmed Tinubu Academy was established with the support of His Excellency President Bola Ahmed Tinubu GCFR and the National Information Technology Development Agency (NITDA), underscoring the administration’s commitment to innovation and education.

Both projects are designed to work hand in hand. The academy, with its fabrication laboratory and advanced learning facilities, will support the clinic by developing prototypes of body organs — especially kidneys — to aid research, early detection, and prevention of chronic kidney disease.

This synergy ensures that education directly fuels healthcare innovation, creating practical solutions to pressing medical challenges.

The First Lady, who expressed deep appreciation to the NITDA Director-General for the honour, re-emphasised the benefits of the academy and the clinic saying: “We are grateful for these honours done to us. Thank you.

“These projects are clear evidence of the state and federal government’s commitment to improving infrastructure, expanding access to quality healthcare, and investing in education and the future of young people.”

The First Lady further highlighted that the Bola Ahmed Tinubu Academy represents the President’s commitment to human capital development and educational excellence. She added, “By investing in the education of our children today, we are securing a better tomorrow for them.”

While speaking on the National Food Bank Programme, the First Lady described it as “a deliberate and sustainable response to food insecurity and malnutrition among vulnerable households in Nigeria.”

She stressed that the initiative is designed to ensure that children under the age of six, pregnant women, and lactating mothers have access to nutritious food, adding that “this programme aligns with the Renewed Hope Agenda of His Excellency President Bola Ahmed Tinubu, advancing food security, improving healthcare outcomes, and building a stronger and more prosperous Nigeria.”

She explained that the programme is being implemented through a strategic partnership between the Office of the First Lady, the Federal Ministry of Health and Social Welfare, the National Primary Health Care Development Agency, and the Bank of Agriculture.

Recalling its rollout, she noted that, “We have launched the National Community Food Trust Fund and inaugurated the Board of Trustees in Abuja on 2 April 2026. On 27 April, we conducted the first launch in Borno State for the North-East Zone, and today, by the grace of God, we are launching the second National Community Food Bank here in Jigawa State for the North-West Zone.”

Commending the swift implementation in Borno, she observed that the programme has already enrolled 560 beneficiaries and reached 468 vulnerable children, pregnant women, and lactating mothers in less than two months. “This impressive achievement gives me confidence that Jigawa State will set even higher standards for others to follow,” she declared.

The First Lady emphasised that Jigawa’s agrarian potential makes it a strategic choice for the North-West launch and called for “sustained collaboration to build a transparent, accountable, and efficient food bank system that reaches vulnerable households across Nigeria.”

Earlier in his remarks, the Jigawa State Governor, Mallam Umar A. Namadi, expressed deep appreciation to Senator Oluremi Tinubu and all distinguished guests, noting that their presence in the state for the North-West launch of the National Community Food Bank Programme was “a strong demonstration of solidarity with families who need support and a reaffirmation of our shared duty to protect the vulnerable segment of our population.”

He emphasised that the event served as a reminder of the duty at the heart of public service — ensuring that every child’s health, survival, and development are safeguarded.

Governor Namadi described the initiative as “a timely intervention that will not only bring food resources closer to the people who need them most but will also contribute to better nutrition indices among our children.”

He acknowledged the vision and compassion of the First Lady, stressing that the food bank programme addresses both immediate needs and the long-term well-being of children.

He added that the programme provides a platform for nutrition and support to vulnerable households through partnerships with community leaders, farmers, civil society organisations, and the private sector.

Linking the initiative to constitutional responsibility, the Governor cited Section 16, Subsection 2 of Nigeria’s Constitution, which mandates the government to provide “suitable and adequate food for all citizens.”

He commended President Bola Ahmed Tinubu for fulfilling this responsibility through national food security and food bank programmes.

He further explained that Jigawa State had already established strong policy foundations through its State Food and Nutrition Policy and State Social Protection Policy, which support targeted nutrition assistance for mothers and children.

According to him, the food bank initiative “strongly complements our existing commitments, serving as an effective mechanism for delivering direct benefits to vulnerable families.”

Highlighting progress already made, Governor Namadi pointed to Jigawa’s homegrown nutrition programme implemented across 300 communities, which screened over 240,000 children in 2024 and 382,000 in 2025.

He noted that the programme successfully transformed thousands of children from moderate acute malnutrition to healthy status, while 600 women were trained to produce locally made nutritious formulas such as Tom Brown.

He assured that North-West governors would give the food bank programme the support it deserves, pledging to provide storage and distribution facilities, strengthen food centres, and ensure transparency and accountability in reaching vulnerable households. “A nutritious meal for a pregnant woman can safeguard two lives, and nutritious food for a child can support learning and growth,” he said, calling for diligence and compassion from all stakeholders to ensure lasting impact.

The newly commissioned projects in Hadejia, especially the President Bola Ahmed Academy and the Senator Oluremi Tinubu Clinic represent a deliberate effort to integrate advanced technological innovation with critical healthcare delivery. The Academy is structured as a sustainability-oriented institution, designed to transform technical knowledge into practical community solutions.

Its infrastructure includes a fabrication laboratory and maker space for prototyping health wearables and prosthetics, an innovation lab with AI-driven tutoring, and a pitch space for start-ups and research ideas. Complementary spaces such as the atrium, auditorium, and residential hostel ensure that the academy functions not only as a training ground but also as a hub for collaboration, digital upskilling, and community engagement.

The clinic serves as the healthcare counterpart to the academy’s innovation ecosystem. It houses a dedicated dialysis centre to address the region’s burden of chronic kidney disease, alongside a fully equipped operating theatre and maternity rooms for safe maternal care. Every ward is integrated with continuous piped oxygen, ensuring readiness for respiratory emergencies, while the facility’s reliance on renewable energy systems guarantees uninterrupted power for critical medical equipment.

This design reflects a strong emphasis on resilience, sustainability, and accessibility, bringing life-saving services closer to underserved communities.

Together, the academy and clinic form a symbiotic model in which education and healthcare reinforce each other. The academy’s fabrication laboratory is expected to provide diagnostic tools and organ prototypes, while the clinic applies these innovations in real-world patient care.

This collaboration offers a pathway for early detection and prevention of chronic illnesses, particularly kidney disease, while also strengthening Nigeria’s broader health technology ecosystem.

The integration of infrastructure, innovation, and medical service delivery positions Hadejia as a potential model for how technology and healthcare can be combined to address pressing community needs.

It may be recalled that last week, the President launched the establishment of the National Health Technology and Data Analytics Office, a move expected to strengthen Nigeria’s capacity for medical research, data-driven healthcare delivery, and the integration of technology into public health systems.

The event was attended by all seven governors from the North-West geopolitical zone and their spouses; the Minister of State for the Federal Capital Territory (FCT), Hajiya Mariya Mahmoud Bunkure; the Minister of State for Education, Professor Suwaiba Sa’id Ahmad; and the Director-General of the National Primary Health Care Development Agency (NPHCDA), Dr Muyi Aina, who represented the Coordinating Minister of Health and Social Welfare, Professor Muhammad Ali Pate.

Also present were the NITDA Director-General Kashifu as well as other government functionaries and traditional rulers.


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