Effects of regulatory review on Insurance Rates in Nigeria

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Insurance companies have commenced the process of reviewing rates at which the third party motor insurance policy will be sold, and are also planning to introduce measures to reduce the proliferation of fake insurance certificates in the country, investigation has revealed.

The rate for third party motor insurance in the country is currently N5,000, but some operators are known to be charging lower in order to attract patronage.

The Chairman, Nigerian Insurers Association, Mr. Eddie Efekoha, who disclosed this in an interview with our correspondent, said the move became necessary in order to promote professionalism and patronage of the policy in the country through the deployment of the Nigerian Insurance Industry Database.

He said, “Following unhealthy competition in this class of business and the lingering issue of fake third party motor policies in circulation, the association is, in addition to the deployment of the NIID, considering other measures that will reduce unnecessary competition and inappropriate pricing of third party insurances.

“A committee is already working out the process and it is expected that the implementation will commence before the second quarter of 2017.”

Efekoha noted that there had been a lot of awareness creation on the NIID.

As a responsive body, he said that the association was mindful of changes in the business environment, which had made it to identify the challenges in the current system for checking the authenticity of motor insurance certificates.

He also observed that the verification was being hampered by downtimes.

“Consequently, we are switching to the use of the Unstructured Supplementary Service Data code for checking the authenticity of insurance certificates,” he said.

According to him, the major advantage of the USSD code is that it can be used in remote towns and villages across Nigeria where telecommunications connectivity is a challenge.

He also said that the association and its members had continued to pursue policies that would improve insurance penetration in the market.

The Director-General of the association, Mr. Sunday Thomas, said the industry had continued to record an increase in the number of genuine insurance policies registered in the NIID database.

Thomas said the NIID was introduced to curb the proliferation of fake motor papers, provide information on the details of vehicles available on Nigerian roads, as well as enhance the verification of certificates in owners’ possession.

According to him, a motorist can check his motor insurance policy status by sending details of his motor through an SMS to a number or on the NIID website.

According to him, all registered insurance companies operating in the country are under the NIID and they regularly upload the details of the vehicles they insure to the platform.

 

Source: Punch