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The insurance industry generated about N253.6bn from motor insurance in the first three quarters of 2024, The PUNCH can reveal.
According to the quarterly reports from the National Insurance Commission, the insurance sector saw Gross Written Premium from motor insurance hit N253.6bn, which is about 10.32 per cent of the entire GWP for the industry in the three quarters, which was N2.46tn.
Motor insurance is an insurance policy where the insurer (insurance company) protects the car of the insured (you) in the event of an accident, theft, loss, or damage. This protection is valid upon paying an agreed annual premium according to what is outlined in your policy. It comprises third-party insurance that protects you only from damages and losses caused to a third party but not your own, comprehensive insurance that covers both the loss and damage to third parties and to you and your vehicle as well, and collision insurance, which covers you for accidents or damages that happen to your vehicle as a result of a collision with another vehicle or object such as a tree, pole, etc.—basically, something that is your fault.
A closer look at the data revealed that GWP generated from motor insurance has steadily increased from the first quarter to the third quarter of the year.
In the first quarter, the sector recorded N48.8bn, and it rose to N86.9bn, a 78.07 per cent appreciation from the previous quarter. For the third quarter, GWP generated from motor insurance stood at N117.9bn, 35.67 per cent higher than Q2 2024.
On the claims settlement side, the regulator’s report indicated that the ratio of net claims paid averaged 95 per cent for the three quarters, with the highest being Q1 at 97.40 per cent.
As of the third quarter, there have been improvements in claims management in the industry, which has served as a driver for expansion in gross claims reported in Q3 2024, reaching N564.1bn, which is representative of about 48.1 per cent of the total premiums generated during Q3.
In Q3, motor insurance led other classes of insurance with an outstanding ratio of 92.3 per cent. The motor insurance business reported an exceptional ratio of 95.3 per cent of net claims paid against gross claims in Q2, and in Q1, motor insurance made the highest record of 97.4 per cent of net claims compared to total claims reported, while General Accident (91.1 per cent), Oil & Gas (90.9 per cent), Fire (77.0 per cent), Marine & Aviation (72.3 per cent) and Miscellaneous (78.3 per cent) follow in that order.
On Saturday, the police commenced nationwide enforcement of the third-party motor insurance following a meeting with NAICOM, noting that the enforcement is aimed at enhancing road safety and protecting the rights of accident victims.
In a statement on Saturday, the police denounced the misinformation in the wake of the enforcement, noting that it is not carrying out the enforcement to generate funds for the police.
“The attention of the police has been drawn to misinformation and misleading comments credited to some social media influencers and activists antagonising the police on the issuance and enforcement of the 3rd party insurance policy, where the NPF has been alleged of using the policy to rake in money. The Nigeria Police Force wishes to emphasise that it does not issue third-party insurance as it has been misconstrued by some individuals. The responsibility for obtaining this mandatory insurance lies with vehicle owners through their respective insurance companies,” part of the statement signed by Force spokesperson, Muyiwa Adejobi, read.
It further read, “The Force has commenced the enforcement operations of the insurance policy with effect from today, February 1, 2025, aiming to enhance road safety and protect the rights of accident victims. In light of this enforcement, the Force, therefore, cautions social media influencers and activists against spreading misinformation regarding insurance policies, as the police is solely for the enforcement, not the issuance of the insurance cover.”
Section 68 of the Insurance Act and Section 312 of the 1945 Motor Vehicle (Third Party Insurance) Act mandated all vehicle owners to possess third-party insurance before operating their vehicles on public roads.
