The Nigerian insurance industry is estimated to be losing about NGN530bn ($1.28bn) each year due to vehicle owners’ failure to purchase motor insurance.
Although Nigeria has about 11.8m registered vehicles plying the roads, only about 1.2m of such vehicles have valid insurance, reported The Guardian.
The situation is aggravated by the inability of some insurance companies to honour claims on motor third-party liability insurance.
A source said vehicle owners would rather not purchase motor insurance but instead prefer to pay fines when they are caught for violating the law.
Mr Obiora Bonaventure, managing director of Arizona Insurance Broker, told The Guardian that claims are sometimes not handled smoothly because some motorists fail to make use of reputable brokers in their motor insurance purchases. He said, “The majority of brokers will actually tell you the companies that are viable, and given the cordial relationship that have existed between brokers and the companies, claims are made easier for customers.”
As part of measures to clean up the insurance sector, the Nigeria Insurance Association has taken action against a few insurance companies for failing to settle claims when due.
Source MEIR
