N1trn target: Insurers discount 80% revenue

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Chuks Udo Okonta

Insurance operators would have scaled through their N1 trillion premium target, if not that they gave out 80 per cent of their revenue as discount, Inspen has learnt.

The Chairman, Mutual Benefits Assurance Plc, Akin Ogunbiyi, who stated this at a forum in Lagos, noted that the unhealthy competition in the industry has robbed the sector great fortunes, stressing that about 80 per cent of the industry’s supposed revenue are loss to unnecessary discounts and other unfair pricing.

He frowned at the rate of third party motor insurance, stressing that some underwriters sell the policy for N1,000 as against the stipulated N5,000.

The Commissioner for Insurance, Mohammed Kari, who was also not happy with the development, said insurers are losing huge revenue on government insurance. He noted that most underwriters in a bid to get government business often throw caution to the winds.

He noted that the National Insurance Commission (NAICOM) is poised to change the ugly vices, committed by some insurers and brokers.

According to him, NAICOM will channel its energy on instituting appropriate premium rate for the industry in 2018.

He faulted some operators who deny that there is rate cutting in the industry, adding that the leadership of the Nigerian Insurers Association (NIA) had approached the commission to intervene in the crisis currently bedeviling rating of insurance risks.

He noted that there are indications that the insurance industry’s gross written premium for this year could climb over N400 billion as against the N320 billion recorded in 2016.

He told NAIPCO Trumpet that there is improved performance in terms of premium income in recent time, adding that compared to similar periods in the previous years, the industry’s total assets stand at N1005 trillion, while the gross written premium as at December 2016 stands at over N320 billion.

According to him, in a bid to deepen insurance business, NAICOM had granted window approval to 17 insurance companies to operate microinsurance and operating licenses were also given to two wholly Takaful companies.

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