Nigeria: The Fantasy Called Fire Insurance in Nigeria

By Chris Agabi
A glance at the 2014 Federal Fire Service (FFS) statistics as released by Data Collation Centre at the headquarters of the Federal Fire Service show that Abuja and Lagos the Service responded to 669 fire incidences in which 288 lives were lost, seven were saved and an estimated property worth N35.562 billion were lost while property worth N7.743 billion was saved.

It is pertinent to note that this statistics is only for two territories out of the 37 (Abuja and 36 states of the federation). The data would be mind-boggling if taken on the entire country. The data collection on fire incidences are also not thorough as statistics are hardly collated in one pool across the states.

The FFS has perennially lamented lack of funding and equipment as their fundamental impediments to success. A visit to a typical fire service station would reveal obsolete and unserviceable fire fighting equipment. “The service also lacks adequate basic fire fighting equipment, chemicals and the staff largely unmotivated to function optimally compared to their counterparts elsewhere in the world”, a staff of the service offered under condition of anonymity.

It’s instructive to note that, in the face of these challenges that face the fire service, they have legal access to some additional funding from insurance companies, but this window has largely remained untapped 13 years since the law was enacted – the Nigerian Insurance Act 2003.

Section 65 of the Insurance Act 2003 the insurance law provides that .25 per cent of insurance premiums generated from public buildings insured against fire be set aside to assist in the funding of the fire service. The fund is to be applied in the procurement of fire fighting equipment for the agency but the funds are not being accessed by the FFS.

Section 65(1) says “every public building shall be insured with a registered insurer against the hazards of collapse, fire, earthquake, storm and flood;

(2) ‘Public Building’, in this section includes a tenement house, house, hostel, a building to which members of the public have ingress and aggress for the purpose of obtaining educational or medical service, or for the purpose of recreation or transaction of business.

This law is largely not enforced and there is no indication that this would happen anytime soon.
A top staff in National Insurance Commission (NAICOM) told our correspondent the amount in the pool is still small since majority of public buildings in Nigeria are without fire insurance.

The staff who spoke under condition of anonymity said “For now, the FFS are not benefiting from the .25 per cent remittance on fire insurance policies fund. But again, how many people are taking the fire policies? It is only when more people take up fire insurance that the commission will be significant. They can help enforce the Act as they are empowered by law to do so” he said.

According to NAICOM the number of public buildings in Nigeria are estimated to be 10 million but it is sad that most of these buildings are uninsured, thereby putting the lives and property of third parties who have rights of access to these buildings at great risk.

To see this enforcement achieved, in March 2015, the National Insurance Commission (NAICOM) and Federal Fire Service agreed to set up a joint committee to ensure the implementation and enforcement of section 65 of the Insurance Act 2003. The gains of this effort are not manifest yet. The commitment was arrived at by the then Commissioner for Insurance, Mr. Fola Daniel and Controller General of the Federal Fire Service, Engr. Joseph Garba Anebi.

The Nigerian Council of Registered Insurance Brokers (NCRIB) and the Nigerian Insurers Association (NIA) have consistently called on the government and members of the public to insure their property, especially public facilities against fire and other disasters – a call that hasn’t been heeded over the years.

A one-time President of NCRB and Chairman of Council, Mr. Ayodapo Shoderu, tasked government to embark on public campaigns on risk prevention and fire insurance across the country.

He reiterated the call for compulsory insurance of all Nigerian public buildings as enshrined in the Insurance Act.

Going forward, NAICOM, insurance companies and the Fire Service must work to ensure section of the Insurance Act is implemented.

This is imperative in order to change the experience of fire fighting in Nigeria. There is a need for national consciousness and involvement of all relevant stakeholders in the fire insurance crusade. This is critical if we must up the ante in procurement of modern fighting equipment for our firemen and providing quality training they need to succeed.