Rural Insurance: Does Evidence Exist For Insurance Penetration In Nigeria?

Insurance companies protect people from financial catastrophe by spreading the risk of financially crippling events over a large number of people. In doing this, insurance companies often sell specific types of insurance to specific demographic groups based on such things as occupation, education, group affiliations, and geographic location. Rural insurance can be insurance of any type that companies market specifically to people and organizations located in rural areas or with certain lifestyles, and practices. Decisions regarding insurance depend crucially on the extent to which individuals are willing to bear risk. Farmer’s decision of whether or not to participate insurance is likely to be influenced by comparison of expected net gain (or loss) with or without insurance. The rural dwellers have favourable attitude towards insurance, hence aware and willing to take Nigeria Agriculture Insurance Corporation [NAIC]. Therefore there is evidence for insurance penetration in the rural areas. The Nigerian Agricultural Insurance Corporation is the sole provider of Agricultural insurance in Nigeria. It is recommended that the Act establishing the Corporation be reviewed, to allow the participation of private sector companies in agricultural insurance. This will improve efficiency and spur healthy competition in the sector. Further, young and well educated people should be encouraged to improve their willingness to take insurance, and provision of insurance services at affordable rate.