NAICOM Speaks On How ‘Rate Cutting’ Affects Insurance Business In Nigeria

The National Insurance Commission (NAICOM) has warned all insurance operators against rate cutting in 2019.

Naija News learnt that the Deputy Commissioner for Insurance, Technical, Sunday Thomas, who issued the warning in an interview  explained that the industry’s target of N1 trillion premium by 2020 may fail due to rate cutting by some operators.

Why insurers failed the N1trn income target — NAICOM… pic.twitter.com/bK8DEp5MfK

— #TushAwards (@TushAwards) January 1, 2019

Mr Thomas said, “there was a point that the third party Insurance premium was ₦5, 000, but some operators were charging ₦1,000. This made third party Gross Premium Written (GPW) to stand at N200 million that year.

“If the operators had charged the ₦5, 000 statutory premium, what is the market likely to produce? I am just telling you why we are not at N1trillion.”Some operators violated NAICOM’s directive, which also hurt their own businesses,” he said.

He, however, urged insurance operators to desist from violating the rules governing insurance practice in 2019.

He urged NAICOM to be committed to pushing the industry to lofty heights, and also ensure government agencies pay the right premium to be able to make their claims.

2019 PERSPECTIVE ON INSURANCE IN NIGERIA

•Let NAICOM be stricter on insurers, to settle claims
•Let insurers demand more funds from their shareholders
•Let intermediaries commit more to their clients
•Let policyholders scrutinize insurers
•Let shareholders set their targets

— Insurance September (@InsureSeptember) December 31, 2018