The number of insured vehicles on
Nigerian roads has dropped from 3.70 million in 2022 to 3.11 million in 2023,
the Chairman, Nigeria Insurers Association, Mr. Segun Omoshein has said.
He spoke at a press briefing on
performance of the industry in 2023 and expectations/forecasts for the industry
in 2024.
He said the insured vehicles
uploaded into the Nigerian Insurance Industry Database (NIID) dropped by 18.97
per cent to 3.11 million as at the end of December, 2023.
He disclosed the industry did not
witness surge of upload on the NIID as expected, rather, it has been almost the
same level.
He added that 2023 was tough year
for everyone including those who had to pay for insurance hence the decline in
insured vehicles.
He noted that the volatile nature
of Nigeria’s economic environment and emerging risks is having negative effects
on Nigerians’ appetite for insurance services, keeping insurers on their toes
in search of initiatives for building public trust to win mass patronage and in
search of offshore reinsurance backing for huge claims from emerging risks.
Besides, Omosehin said government
policies such as fuel subsidy removal and upward review of premium on
compulsory Motor Third Party insurance, has compelled many Nigerians to
restrict themselves on the number of vehicles they put on the road as well as number
of vehicle particulars they renew between last year and this year.
As a result, he said insurance
Chief Executives have been put on their toes in search of initiatives to build
public trust, credibility for patronage and offshore reinsurance backing for
huge claims coming their way.
He stressed that the
macro-economic situation emanating from some policies of government affected
people’s life style and spending habits thereby limiting their purchasing power
and appetite for some insurance policies even the compulsory insurances.
Attributing this to initial
resistance expected from consumers when prices of goods change, Omosehin said
he expects change in behaviour from the insuring public this year adding that
as enforcement continues, people would do the right thing.
Omoshein added: “We are more interested in pushing the policy count and being able to get more people come into the platforms so that we can account for the genuine third party policies that are issued in the market. This is the major area of focus and that we have seen a major progress for us as an industry.
“The increment in premium could
have impacted the numbers, but 2023 was a tough year for everyone including
those who had to pay for insurance. This is despite the fact that the association
embarked on more awareness creation and enforcement of the law since the premiums
were increased,” he said.
The development is coming
following the upward review on premium rate for motor insurance by the National
Insurance Commission (NAICOM) in December 2022.
The new premium rate which became
effective on January 1, 2023 saw Private Vehicles increased from N5, 000 (for
N1 million Third Party Property Damage (TPPD) limit) to N15, 000 to provide
benefit for N3 million TPPD, while Owner Good Vehicles of N20, 000 premium for
N5 million claims limit, and Staff Bus to N20,000 premium for N3 million claims
limit.
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.
Courtesy: The Nation
Leave Comments