The brokerage fraternity of the country’s insurance industry has confirmed the growing acceptance of the new premium rate for motor insurance, which became effective January 1, 2023.
According to them, larger proportion of the consumers appreciates the reason for the increment considering the rate of inflation and impact on cost of assets replacement.
They believe that, the new premium rate will position underwriters better to meet claims obligations and even more promptly.
These were some of the takeaways at the NCRIB Lagos Area Committee March Annual General Meeting held in Lagos with the theme ‘The New Motor Insurance Rates: Brokers and Underwriters Perspective’.
Olufunke Adenusi, managing director/CEO, Colximate Insurance Brokers who spoke on ‘Brokers Perspective’ said “No body has opted not to insure”.
According to her, a lot of clients have accepted the new premium rate, having understood it was in line with economic realities.
Adenusi said “when you consider the cost of spare parts in terms of replacement cost in event of accident in motor third party insurance, you will appreciate the need for this increase, she said.
She said the new rate will increase the premium income of underwriters and enable them meet claims more promptly.
Yetunde Ilori, director general, Nigerian Insurers Association (NIA) speaking on ‘Underwriters Perspective’ said the increase in premium rate for motor business was long overdue.
According to her, motor third party business in the insurance industry was not profitable, and so running at a loss.
Ilori who was represented by Lanre Ojuola, deputy director, Operations at NIA said “we were not running our motor portfolio at profit, and third party was at a loss.
She said, about 43 insurance companies in 2021 generated N2.5 billion premium from motor third party and paid out N4.3 billion on claims.
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Ilori therefore urged the brokers not to accept the new rate because it was made by the National Insurance Commission (NAICOM), but because it was justifiable given the economic realities.
Ilori said the target is to have a sound insurance industry that is able to meet its expectation at all times, provide employment for teaming youths and contribute reasonably to the country’s GDP.
Speaking earlier, Rotimi Edu, president, NCRIB said it is heart-warming that the LAC has thought it wise to use this opportunity to retool its members on the new market policy and how it can be maximized to serve customers better.
Edu who was represented by Ekeoma Ezeibe, vice president of NCRIB said, the Council will continue to encourage platforms and opportunities that will enhance member’s knowledge to deliver value to clients.
Ademola Olutisin, chairman NCRIB Lagos Area Committee in his welcome remarks said the event was to provide opportunity for her members to understand the new policy and share their experiences with clients after two months of implementation.
With the new tariff on third party motor insurance effective 1st January 2023, NAICOM is driving to see that motorist have adequate cover to protect citizens and assets that become victims of accidents on Nigerian roads and across the ECOWAS Region.
NAICOM is therefore seeking that motorists take genuine insurance policies from registered insurance companies, make claims when there is accident involving third parties, and for own vehicles in case of comprehensive covers.
Under the new tariff, released 22nd December 2022, private vehicles that were paying N5,000 premium for N1 million Third Party Property Damage (TPPD) limit, are now to pay N15,000 premium for N3 million, while owner goods vehicles are to pay N20,000 premium for N5 million compensation limit, and staff buses are to pay N20,000 premium for N3 million.
For commercial trucks and general cartage, they are to pay N100, 000 premium for N5 million TPPD limit; tricycles N5, 000 for N2 million TPPD limit, and motor cycles N3, 000 for N1 million TPPD limit.
While for comprehensive motor insurance policy, premium rate shall not been less than five percent of the sum insured after all rebates and discount.
To verify the genuineness of your motor insurance, the Nigerian Insurers Association (NIA) advise that you run your policy in the Nigerian Insurance Industry Data base (NIID).
Therefore, if your policy document is not captured in NIID, then that policy document you have as motor third party insurance certificate is fake and worth nothing.
You can actually verify it yourself from any where you are. This has not only brought a check to fake documents, it has now empowered you to make claims on all third party liabilities.
To verify the document, simply apply this code into your GSM handset, and in seconds the status of your insurance is displayed on your screen. (SMS: policy number*plate number to 33125).This is compliant with all networks.
If the resultant message says, “not available on NIID date base, then know that what you are parading as insurance is fake. But if it’s there, it tells you immediately the name in which your vehicle is registered; the make and model of the vehicle; the colour of the vehicle; name of the insurance company and date of expiration of the policy.
