The National Insurance Commission (NAICOM), Nigeria's regulator of the insurance sector, has announced new Premium Rates for various sub-categories of Motor Insurance with effect from January 1, 2023 and this is unlikely to be postponed. This is because it was long-awaited by industry stakeholders including some discerning buyers of this class of insurance based on the advice of their insurance brokers and advisors. Though the effective date has come to many individuals and organisations as a surprise and even unsettled their 2023 budgets, it is becoming evident that the new Premium Rates hold value for all stakeholders and should be accepted with the understanding of the intent and purpose NAICOM announced it.

I am all for this and would be engaging, enlightening and educating my community of policyholders,  investors in insurance and other associates on the advantages of the new Premium Rates notwithstanding what some describe as too short a notice and poor timeliness. Price changes are the constant now and insurance is only becoming part of it, in this respect, after many decades.

That said, in my view, the difference between this announcement by NAICOM and previous ones, is the need to actively engage the public with a view to answering their questions, which answers the insurance companies cannot readily and effectively answer.

Some of these questions are: 

1. Does this affect everyone with a Motor Insurance Policy or only those whose policies fall due for renewal on January 1, 2023 and subsequent anniversary dates?

2. What will happen to those who had recently paid N5,000 for Third Party Motor Insurance of their private vehicles and others? Will they be required to pay additional N10,000 to enjoy the benefits of the policy?

3. What should policyholders expect in terms of claims settlements and payments? Are the durations still left for the insurance companies to determine?

4. Will insurance certificates issued from Vehicle Licensing Offices continue to be valid and acceptable?

These have been some of the Frequently Asked Questions (FAQs) I have received since the announcement by NAICOM and the responses to these questions would be necessary, not only to direct the correct actions of the insuring public but also to ensure fake and unscrupulous persons or organizations do not take advantage of innocent Nigerians.

Unlike in the past, NAICOM would need to open its portal to receive the questions and provide answers promptly.

Considering that we had a worsening situation where insurance companies that partnered with Vehicle Licensing Offices to sell Third Party Motor Insurance ended up with N500 of the N5,000 paid, NAICOM needs to probably pronounce a ban on the sale of insurance at those offices. This will immediately eliminate the possibility of the actors simply reaching agreements on remitting amounts lower than N15,000 and still leaving insurance companies in the position where they are unable to settle and pay claims promptly; one of the reasons for the new rates. 

Unfortunately, NAICOM does not yet have a Directorate for Enlightenment and Enforcement, which would have taken on the issues following the announcement. 

Without NAICOM's engagement, enlightenment and education of the insuring public and policyholders, the latter are left to investigate and find answers for themselves. Therefore, registered and licensed insurance agents tied to insurance companies, and insurance brokers, will need to undertake the Herculean task of engaging, enlightening and educating the insuring public for proper and professional guidance. Sadly, the capacity to go that way is either absent or complicated, due to past experiences. 

Consequently, the insurance industry in Nigeria is now taking a bend that will require visibly new actions to give more confidence to the public and the regulator and operators cannot just afford to use the old means of communication to handle these new issues.

This is the time for the NAICOM-led Insurance CEOs Committee to engage experts in marketing  communications, who have always been willing and ready to work with the insurance industry leaders. We need to open up, may be by issuing a Request for Proposal (RFP) and selecting from submissions that would be made by the best marketing  communication firms in Nigeria. 

Nigerians, in my view, are looking forward to taking up different insurance policies to protect themselves from rising risks and desire to have strong and effective relationships with insurance operators. 

Interestingly, digital solutions provided by Insurtech start-ups have enhanced the possibilities of individuals and organisations getting VALUE from insurance. 

Making insurance work in Nigeria is a mission that must be accomplished by all stakeholders in the insurance industry, and the time to galvanise all our efforts is NOW!

About The Author 

Ekerete Olawoye Gam-Ikon, MNIM, CPP, is a management consultant with a specialization in Strategy and Insurance. You can contact him via e:mail [email protected] and mobile +234-806-648-1111