N350bn Capital Expenditure Budget: Insurers Express Hope of Better Days
With the proposed release of N350billion first tranche of expenditure for capital projects under the 2017 Budget, and plans to set up a portal system that will serve as a visual market place for buyers and sellers of insurance especially third party motor insurance, insurance managers have expressed optimism about the prospect of the industry.
The insurers said the industry sees high prospect for the rest of the year because part of the capital project would come to the industry through the insurances of the projects.
Chairman Nigeria Insurers Association (NIA) , the umbrella body of insurance underwriters in Nigerai, Eddie Efekoha, who stated this at a media briefing in Lagos, noted that already some of the capital projects are on the verge of being executed as the executors are already talking to insurers.
Efekoha, who however noted that the industry is besieged by lots of challenges, some of which would be solved through engagements, also said the NIA, as the umbrella body of insurance underwriters, has set plan in motion to develop a portal system where insurers will play together especially in the sale of motor insurance.
He expressed the regret that out of the120 million available statistics on the number of vehicles that ply Nigerian roads, only nine million have been off loaded in the Nigeria Insurance Industry Data (NIID),a centralised database system, designed by the association to check activities of insurance fraudsters.
The NIID was meant to be repository of all third party motor insurance policies underwritten by the insurance companies in Nigeria.
According to Efekoha, out of the nine million, only 4.4 mil- lion have genuine certificates.
He said this was why the association resolved to develop the market portal where the insurers will collectively share business on third party motor insurance between the lead underwriter and co-underwriters who will share from the business.
Efekoha, however said negotiation was going among the underwriters on the sharing formula for businesses that enters the porter adding that it may be at the ratio of 80 to 20.
He also expressed the hope that the ongoing debate on the insurance act amendment among the law makers would bring good days to the industry.
According to him, though some have argued for increase of third party motor insurance premium from the currentN5000 to N7,500, while others said it should be increased to N10, 000 the fact remains that people have seen the need to increase premium payable on motor insurance.
Efekoha, who spoke on other issues affecting the industry, said recent flood in the country has increased quantum of claims coming to the industry.
According to him, Nigerians have seen the need to insure their assets against damage, even as he explained that insurers cover flood risk through extension of fire policy.