Insurance companies in Nigeria are expected to reap a fresh N135 billion premium income in the current financial year from 9 million uninsured vehicles across the country, LEADERSHIP learnt.
Already, the National Insurance Commission (NAICOM) and the Nigerians Police Force (NPF) have partnered to kickstart a nationwide enforcement of the Third-Party Motor Insurance Policy, effective today in a move to clampdown of vehicle plying Nigerian roads without insurance certificate or with fake insurance papers.
Data earlier sourced from the Federal Roads Safety Corps(FRSC) and the Nigerian Insurers Association(NIA) revealed that, there are 12million vehicles plying roads across the country of which only 3.11million were insured, leaving 9 million vehicles uninsured.
Currently, annual premium for Third Party Motor Insurance is being sold at N15,000 after it was earlier increased from N5,000.
However, LEADERSHIP analysis revealed that, the 9 million uninsured vehicles will now be forced to part with N15,000 each as motor insurance premium , which now amounts to N135billion annually, a development that will further increase the revenue base of insurance sector.
The planned nationwide enforcement of the Third-Party Motor Insurance Policy, effective February 1, 2025 is expected to limit the volume of fake insurance certificates, increase subscription to genuine insurance and increase insurance adoption in the country.
Earlier, the Nigerian Insurers Association (NIA), stated that, the association recognises the immense potential of this enforcement to drive positive change in the insurance industry and the broader economy.
“With millions of vehicles on Nigerian roads, this move is expected to increase the number of genuinely insured vehicles, reduce the prevalence of fake insurance policies, and create a more robust safety net for motorists and road users alike,” it stated.
The chairman of NIA, Mr. Kunle Ahmed, explained that, the initiative also aligns with his administration’s agenda to prioritise increasing awareness of the benefits of insurance, fostering innovation within the industry, and enhancing partnerships with key stakeholders to strengthen Nigeria’s insurance ecosystem.
As the enforcement takes effect, he assured the insuring public and other stakeholders that its members are fully prepared to provide seamless access to third party motor insurance policies through authorized channels, ensuring that every Nigerian motorist can protect their risk and comply with the law.
We will work closely with our members to ensure efficient service delivery, innovative products, and improved customer experiences, he pledged.
NIA believes this enforcement is a game-changer for the industry, as it will encourage greater public trust in insurance, reduce uninsured risks, and stimulate economic activity.
“The NIA calls on vehicle owners nationwide to take full advantage of this opportunity by obtaining their third-party motor insurance policies through licensed and authorised insurers. We can build a safer, more accountable, and better-protected road network for all Nigerians,” he stressed.
This initiative, he said, aligns with the provisions of Section 68 of the Insurance Act 2003 as it is a significant step towards strengthening compliance, ensuring road safety, and protecting motorists and third parties on Nigerian roads.
Meanwhile , the president, Nigerian Council of Registered Insurance Brokers(NCRIB), Prince Babatunde Oguntade, had applauded the motor insurance enforcement initiative, saying, his council is in full support and will offer the needed assistance when needed.
If the enforcement is implemented to the latter, and more vehicles are now insured, he said, this will further deepen insurance penetration and acceptance in the country.
He also charged the regulatory authorities to extent such enforcement to other classes of insurance, especially, the compulsory ones, such as; Public buildings insurance, group life insurance, among others , so that, violators are made to face the wrath of the law.
The FRSC Act demands that any automobile on Nigerian roads must have at least third party motor insurance policy or comprehensive insurance coverage which goes for about 10 per cent of the value of a vehicle.
Third Party Vehicle Insurance comes at a fixed price of N15, 000 after it was increased from N5,000 last year to cater for inflation and increasing price for vehicle spare parts.
