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.

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