For N15,000, Nigerians To Get N3m Motor Insurance Claims From 2023
By Sola Alabadan
Based on the new rates approved by the National Insurance Commission (NAICOM), policyholders of Motor third-party insurance who paid N15,000 premium, will be eligible to collect N3 million claims in the event of an accident, from January 2023.
The new benefit to motor policyholders which was contained in a circular dated December 22, 2022, from the National Insurance Commission (NAICOM), also raised the cheapest and the most popular class of insurance in the country from N5,000 to N15,000, indicating a 200 per cent increase.
For buyers of comprehensive motor insurance, they shall not pay less than five per cent of the sum insured or the price of the vehicle after all rebates and discounts.
In the circular signed by its Director, Policy, and regulation, Leo Akah to all insurance institutions entitled, “New Premium Rates For Motor”, the sector regulator raises the claims and cost of insurance on all classes of motor insurance including motorcycles.
The highest cost in the new rates is N100,000 for a commercial truck/general cartage which also fetches the policyholders N5 million claims in the event of an accident.
The implication of this to the industry is an improved premium income in the class of business from the Year 2023. Until recently, the motor insurance class has been the major earner of income for some insurance underwriters and this new development will swell their income.
The industry earned a total of N77.7 billion from motor insurance in a period of six months covering April to September 2022. The class of business fetched the industry N32.4 billion between April and June and also, N45.3 billion between July and September.
Consequently, premium income from motor insurance is expected to improve the earnings of the industry operators by 200 percent following the addition of N10,000 to the cheapest third party which currently stands at N5,000.
The commission according to the circular stated that it was empowered to approve the new rates for motor insurance premiums by Section 7 of the NAICOM Act 1997 and other extant laws, noting that the new motor insurance premium rates become effective from January 1, 2023.
It warns that failure to comply with the circular shall attract appropriate regulatory sanction.
NAICOM in the new rates which states that third-party insurance policies are inclusive of the Ecowas Brown Card also approved an N20,000 premium for Own goods motor insurance while the policyholders will collect N5 million claims in the event of an accident. The new development fixed the premium rate on a staff bus at N20,000 while the insured can collect N3 million claims in the case of an accident.
For commercial vehicles, trucks/general cartage has a claims limit of N5 million while the new premium is N100,000; special types of insurance have a claims limit of N3 million while the new premium is N20,000, and owners of tricycles will pay N5,000 for insurance of each to enjoy N2 million claims. For motorcycle insurance, the new premium is N3,000 while the claims limit is now N1 million.
Guinea Insurance injects N900m capital into business
Guinea Insurance Plc, one of the oldest insurance companies in Nigeria said it injected about N900 million as capital into its business in 2022 and is in the process of listing 1.8 billion shares.
The Managing Director/Chief Executive Officer of the insurance company, Mr. Ademola Abidogun disclosed this at the Nigerian Association of Insurance and Pension Editors’ (NAIPE) 2023 first quarter CEO’s Forum in Lagos.
Abidogun said the insurer has a lot of funds within its system and over N2billon cash under its management to do business.
He noted that the underwriting firm made the highest Gross Premium Written (GPI) of N1.4 billion in 2022, compared to the last ten years.
“We were also able to make underwriting profit. If you look at the statistics, Guinea insurance has consistently grown so much in its underwriting profit.
“When you check the financials, you will see that the core business of insurance is underwriting, which means; collect business, underwrite it and make profit,” he said.
According to Abidogun, the insurance company was working to improve its investment portfolio, as fund was essential to sustain a business.
The Managing director hinted that Guinea insurance’s claims payment method is one of the best in the market because the firm believes, one of the main reason for doing insurance business is to pay claims.
“If we pride ourself as one of the best in the industry in terms of claims payments, we must be able to pay claims after collecting people’s premium” Abidogun said.
According to him, while the underwriting firm had experienced some challenges few years ago in the market, it has been able to resuscitate its business between 2021 and 2022.
Abidogun noted that Guinea insurance also had to confront perception issues, because a lot of people think the insurer is a one man business, meanwhile it is a Plc with a very robust structure.
The managing director said that the insurance firm had started business well in year 2023 in terms of production and as at February, it had done over 300 percent of what it did same time last year.
“We will be able to deliver in terms of our plans for the year. The most important thing is for an organisation to have capacity, which has to do with financials and people driving the business and we will continue to evolve,” he said.
Guinea Insurance Moves To Delight Shareholders
The management of Guinea Insurance PLC is repositioning the insurance company to ensure value creation and optimum returns to its shareholders. the Managing Director, Mr. Ademola Abidogun, said.
Speaking at the Nigerian Association of Insurance and Pension Editors’ (NAIPE) first quarter 2023 CEOs Forum in Lagos recently, Abidogun said: “We have a very robust board and workforce that is made up of accountants, lawyers and other professionals with a very strong business experience working together to ensure we are where we are today.”
Abidogun said the company has invested so much in staff training and acquisition of technology, adding that currently “we have so many portals including the Third Party Portal which helps us in doing our Motor Business. Motor Business still remains the biggest of our products and we have partnership with a few brokers on that.”
According to him, “we are also getting new businesses from Brokers such as Marine Insurance for example. This segment is also growing despite the fact that there has been a lot of challenges in the areas of dollars and importation. Our oil and gas business portfolio too has also picked up because people are very passionate about insurance.”
On agric insurance, he said the Company is partnering with some international bodies to grow that segment.
He said the process of getting approval for Travel Insurance from NAICOM is ongoing.
Abidogun said the Company’s portal for its Motor and Marine insurance business is strengthening their partnership with some brokers, which he said have started patronizing them.
His words “The brokers partnership, our new business initiatives, our portal that we have for Motor and Marine insurances and some business with government agencies combined to ensure that we are getting value for our shareholders.”
In term of opening new branches, he said “We really don’t want to open a lot of branches but what we are doing is to have as many sales outlets as possible because to open new branch offices now is very expensive. We want to have sales outlets and well run central underwriting system and a central accounting system.
“Although we have few branches in strategic areas, we also want to open more sales outlets in strategic areas to complement the existing branch and enhance our operations in selling most of our products and repositioning our brands there.”
Pension: PenOp Wants Bill Seeking To Exempt National Assembly Staff Discarded
By Sola Alabadan
The Pension Fund Operators Association of Nigeria (PenOp) has raised the alarm that the bill seeking to exempt the National Assembly Service from the Contributory Pension Scheme (CPS) will have negative impacts on the pensioners and should therefore be discarded.
Recently, both Chambers of the National Assembly passed a “Bill for an Act to amend the Pension Reform Act, 2014, to Exclude/Exempt the National Assembly Service from the Contributory Pension Scheme and Establish the National Assembly Service Pension Board; and for Related Matters.”
PenOp stated that “the passage of this bill sets a dangerous precedence that will not augur well for hardworking Nigerians, working across the private and public sector, who depend on the Contributory Pension Scheme (CPS) for retirement security and stability.
“The introduction of the CPS in Nigeria marked a departure from the unsustainable pension schemes the country had been operating in the past. This scheme has brought transparency, international best practice and guaranteed peace of mind to millions of pensioners. For these reasons and many more, the need for the above bill is indeed unfathomable and unjustifiable.”
The pension operators expressed grave concern regarding the way the bill was passed, saying” The passage of this bill seems to have been unnecessarily expedited and shrouded in secrecy with very little engagement and input from critical stakeholders—as it was passed during the National Assembly’s recess.”” “Indeed, it is disturbing that this bill did not go through any public hearing, a key component of the legislative process that allows stakeholders to have their voices and opinions heard for possible inclusion in the process. If this was done, pertinent issues such as the amendment of retirement age, funding of pension liability, and the potential debt burden on government—all of which are affected by this bill—would have been debated and brought to the fore.
“The National Assembly prides itself as the heart of our democracy. Indeed, the halls of the National Assembly are the people’s halls. As such, it is extremely important that the legislative authority the National Assembly wields is in no way subverted to serve vested interests in passing anti-people legislation. The exemption of any agency or group from the Contributory Pension Scheme (CPS) holds grave consequences for the Nation’s struggling fiscal position and will potentially upend the retirement security of pensioners who have given their blood and sweat in service to our great Nation.
“Therefore, without reservations, PenOp, as a critical stakeholder in Nigeria’s pension industry, wishes to state that it considers the passage of this bill a procedural anomaly and legislative immorality. Hence, we call on all well-meaning Nigerians to note this grave anomaly and join us in calling on the National Assembly to reconsider its decision as well as enjoin the Executive and the Judiciary to outrightly condemn this action.
“More specifically, we call on the National Economic Council, the Minister of Finance, Budget & National Planning, the Secretary to the Government of the Federation and all relevant government stakeholders to look into this anti-people bill and ensure that it is not signed into law.
“Finally, should this bill proceed to Mr. President, we call on him to kindly refuse to assent to this bill in the interest of the people, the sustainability of the Nation’s pension system and the flawed procedure in which this bill went through.”