Operators in the Nigerian insurance industry have said that vehicle owners and other road users will benefit more from the new motor insurance packages.
NAICOM, in December raised the premium for third-party motor insurance premium from N5,000 to N15,000 effective January 1, 2023. The claims benefit was also raised from N1m to N3m.
The Commissioner for Insurance, NAICOM, Mr Sunday Thomas, said the N5,000 that was initially paid on third party had been implemented for about 20 years.
“The new rate is a restructuring of the premium to reflect the added value of access,” he said.
Explaining, he said the new rates offer more benefits to Nigerian vehicle owners and other road users driving within the country and in ECOWAS region because they were now covered for enlarged trips.
According to him, vehicle owners will not need to buy a separate Ecowas Brown Card cover for each trip embarked upon in the West African region.
He said, “If somebody was to go to Ghana or Togo five times last year, add the cost of Ecowas Brown Card each time to the third party without increasing the benefits. The benefits have increased now.”
In a circular in December 2022 with the number ‘NAICOM/DPR/CIR/46/2022 to all insurance companies titled ‘New premium rates for motor insurance’, the insurance industry regulator stated that comprehensive motor insurance policy premium rate will not be less than five per cent of the sum insured after all rebates and discounts.
It stated that the third party insurance was also inclusive of Ecowas Brown Card.
According to the circular, “Staff bus attracted N20,000 premium with N3m compensation; “Commercial (trucks, general cartage) attracted N100,000 premium with N5m compensation; Special types attracted N20,000 premium with N3m compensation; Tricycle attracted N5,000 with N2m compensation; and motor cycle attracted N3,000 with N1m compensation.”
However, in a report on ‘ECOWAS Brown Card Insurance Scheme @40’ released by the Nigerian Insurers Association, The Secretary-General, Nigerian National Bureau, Mrs Henrietta Anyanna, said before the Automatic Brown Card regime was adopted in Nigeria, travellers in Nigeria within the ECOWAS regions were paid N84m claims.
She said, “Claims worth more than N84m have been paid to Nigerian third-party victims of accidents as of December 31st, 2021, even in the absence of an Automatic Ecowas Brown Card regime.
“Imagine what the situation will be like after the official implementation of the Automatic Brown Card in Nigeria. The scheme is putting smiles on the faces of victims as well as transforming lives of the less privileged forever.”
The ECOWAS Brown Card insurance scheme was established on May 19, 1982, following the creation of the Economic Community of West African States.