In the past few years, there have been significant initiatives to increase low - income people's access tofinancial services, first with microfinance and then moving on to micro-insurance. Insurance businessesincur inherent risks in serving the low-end market due to the complexity of insurance and the fragility ofthe target population. This study identifies these risks, explains the measures used by Nigerian insurance companies to mitigate them, and suggests innovative ways to reduce them. Twelvecompanies that offer micro-insurance products in Nigeria were selected using purposive sampling, andone hundred and twenty key informants responded to the survey. Percentages, means, and standarddeviations were calculated to aid in the description of the data. Pearson Correlations and Chi-SquareTests were performed to determine the level of correlation between the variables of interest. Lowpenetration, limited distribution channels, correlation risks, policy lapse, product design, pricing, adverseselection, and a rigid regulatory framework are all risks that micro-insurance providers face, according to the survey. Use of technology to reduce administration costs, control of moral hazard and adverseselection, rigorous investigation of claims, development of risk measuring models, public awarenesscampaigns, and constant monitoring of clients are some of the measures being employed to mitigatethe risks. To effectively reduce micro-insurance risks, micro-insurance service providers should invest inresearch and actuarial services to optimize product pricing, develop innovative distribution channels, build technology-conscious partnerships, establishRisk reference bureaus where clients' risk profiles can be shared and exploit new flexible premium payment terms. The National Insurance Commission (NAICOM), the industry regulator, is also urged to help ensure that micro-insurance policies are written in plain language that clients easily understand.
