Mr. Olusegun Omoshein, the chairman, Nigerian Insurer Association (NIA), has said that the volatile nature of Nigeria economy environment and emerging risks, are critical factors responsible for the drop in the number of insured vehicles on Nigerian road in the year 2023.
He said the number of insured vehicles on Nigerian roads dropped from 3.70 million in 2022 to 3.1 million in 2023.
He disclosed this at a press briefing on performance of the industry in 2023 and expectations/forecasts for the industry in 2024.
According to him, 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 however stressed that the industry did not witness surge of upload on the NIID as expected, rather, it has been almost the same level.
He further underscore that 2023 was a tough year for everyone including those who had to pay for insurance hence the decline in insured vehicles.
The insurance boss noted that the volatile economic environment in Nigeria, couple with the emerging risks took a toll on Nigerians’ appetite for insurance services, keeping insurers on their toes and 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.
Omosehin also noted that 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.
In his words:
“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,”
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.
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