Insurers expect premium hikes to drive growth in Q1

Insurance companies in Nigeria are looking forward to growth in premium income in the first quarter of this year.

The expectation is based on the compliance level noticed so far with the reviewed motor premiums as confirmed by members of the Nigerian Insurers Association (NIA) and broker partners.

This is as insurers have also promised to improve their services and claims payment as a way of building consumer confidence and attracting new buyers.

At the end of the Insurers Committee Meeting for March 2023 held in Lagos, the industry agreed to lower the claims process and encourage customers to take up policies.

The Insurers Committee believes that lowering claims documentation process, inviting customers through advertorials to come for claims and increased awareness creation would boost confidence and encourage participation.

Ben Ujoatuonu, speaking on behalf of the sub-publicity committee of the Insurers Committee, said: “Part of the outcome of the meeting is on how we can as an industry reduce claims documentation process.

“So, underwriters are being encouraged to publish a list of unclaimed claims once in a while in the national newspapers, so that customers who had claims but were not aware or dropped off due to documentation issues can be encouraged to come and claim their monies.”

Ujoatuonu, joined by Rasaaq Salami, deputy director of corporate communications and market development at the National Insurance Commission; and Davis Iyasere, head of corporate communications at the Nigerian Insurers Association, said the publications would help pass the message to the public that insurers are ready and committed to claims payment.

“Also agreed during the meeting was the need for customer service and engagement, and operators were encouraged to come up with things that will enhance customer relationship, endear them to insurance and retain already existing customers,” he said.

According to him, the Insurers Committee has also approved to commence nationwide media publicity on the reviewed motor policy for awareness and education.

“The target is not just letting the public know that there is a review in the rates for motor insurance, but that there are more benefits including huge sum assured or claims value, as well as the benefit of free ECOWAS brown card cover,” he said.

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He said this publicity is expected to commence before May 2023 and it is expected to be enlightening and educative on what the reviewed motor insurance rate is all about.

Olufunke Adenusi, managing director/CEO, Colximate Insurance Brokers, said a lot of clients have accepted the new premium, having understood the hike was in line with economic realities.

“When you consider the cost of spare parts in terms of replacement cost in the event of an accident in motor third party insurance, you will appreciate the need for this increase,” she said.

She said the new premiums will increase the premium income of underwriters and enable them to meet claims more promptly.

Yetunde Ilori, director general of Nigerian Insurers Association (NIA), said the increase in premiums for motor business was long overdue.

“We were not running our motor portfolio at profit, and the third party was at a loss.”

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.