How Nigeria’s Motor Insurance Losses N166bn in 3years-NIA DG

Not less than whopping N165.83 billion losses have been recorded by the motor insurance segment of Nigeria’s insurance industry in the pace of three years, Director-General of the Nigerian Insurers Association (NIA), Mrs Yetunde Ilori disclosed.

The DG in a startling revelation, noted that the period from 2020 to 2022, while the financial turmoil within the Nigerian motor insurance sector has been a cause for concern among insurers and industry stakeholders.

Mrs. Yetunde Ilori brought this issue to the forefront during a recent event held in Lagos, where she revealed a concerning breakdown of these losses,

According to her, in 2020, the industry loss N48.76 billion, In fact, the troubles began in 2020 when the sector reported a loss of N48.76 billion. Factors contributing to this loss included increased accident claims, fraudulent activities, and rising operational costs.

“The situation escalated in 2021, with the motor insurance segment incurring a loss of N57.04 billion. High claims settlements and inadequate premium pricing were major contributors to this ongoing crisis.

“The woes continued into 2022 when the industry suffered a loss of N60.01 billion. The persistence of issues such as premium leakage, fraud, and regulatory challenges only exacerbated the situation”, she explained.

Base on the above trend movement, expert is the opinion that this year 2023 figure will be around N70 billion plus dips if not tackled before year end.

However, on the industry response and technological solutions, Mrs Ilori, along with other insurance leaders, acknowledges the urgent need to address this crisis. The Nigerian Insurers Association (NIA) is spearheading efforts to curb these financial losses by harnessing the power of technology.

On his part, Chairman of the NIA, Olusegun Omosehin, emphasized that the industry is making significant strides to prevent premium leakages through the adoption of electronic insurance covers. The introduction of electronic third-party motor insurance policies is a prominent part of these efforts.

“This technology-driven approach is aimed at not only safeguarding against financial losses but also increasing the industry’s gross premium. A target long pursued by the sector.”

On leveraging technology and collaborations, Omosehin expressed optimism that technology and digital innovations would play a pivotal role in reshaping the insurance industry. “The industry is focused on adopting digital solutions, particularly in third-party motor insurance, and is actively collaborating with state governments, with Lagos State leading the way.

“The collaboration between the insurance industry and tech companies is expected to yield positive results, helping to address the challenges faced by the motor insurance sector. This collaborative approach underscores the industry’s commitment to adapting and thriving in an increasingly digital world”, he said.