Reinsurers Kickstart Implementation Of New Fire Insurance Ratings

Reinsurers, under the auspices of the Professional Re-Insurers Association of Nigeria (PRAN) have commenced the implementation of new rates on fire insurance in the country, LEADERSHIP can now reveal. Findings show that the new rates had kickstarted last month after the conclusion of the stakeholders engagement between the reinsurers and the insurance industry players.

The new rates, which ought to have commenced in January 2022, was earlier suspended following uproars from the industry, especially, the brokers over the timing of the commencement of the new rates.

Reinsurers, had, in November 2021, released a new version of the Fire Rating Guide, an amendment to the existing Guide published in 2009.

The new fire rate as specified in the new guideline, it was learnt, is about 400 per cent rise in reinsurance rate, which invariably amounts to increase in premium for the insuring public.

To this end, the new rate regime will take full effect in the next policy renewals or fresh policy.

This change in rates, it was learnt, was to ensure that Risks covers could be adequately compensated looking at the current monetary and economic realities.

Confirming this development on Tuesday at Brokers Evening sponsored by Leadway Assurance Company Limited, in Yaba, Lagos, the president of the Nigerian Council of Registered Insurance Brokers (NCRIB), Mr Rotimi Edu, said: “you would recall that one of the focuses of the Governing Board is to continually give value to members and enhance their compliance with regulatory requirements expected of them.

“It is this focus that made the Council pursued diligently issues relating to the new Fire Rating Guide by PRAN. It is hoped that with the commencement of the new Rates. Members will be adequately informed and comply for the good of our market.”

He had, earlier in the year, disclosed that a new calibration for the calculation of premium on fire insurance for the Nigerian market is to come into effect on July 1, 2022.

The suspension of the manual, he had said, would prepare the insuring public for a possible rate increase, unlike catching them unaware, like the rating manuals wanted to do prior to suspension.Insurance companies, he said, must be encouraged to rise to the occasion of indemnifying clients in the event of loss, arguing that one of the sure ways of achieving the feat, is through the application adequate rates on the premiums paid by clients.