NIA eyes uniform rates for motor excess, depreciation

Chuks Udo Okonta

The era of offering different rates on motor tariff and policy based on excess and depression would soon be over, as the Nigerian Insurers Association (NIA) said it is presently reviewing the motor policy template to align it with global standard.

Chairman Motor Technical Committee of the NIA, Mrs Omolara Posi-Adedayo, in a report presented to the association, said the committee has commenced work on the review of the motor tariff and policy words of motor policies to meet up with global standard.

She noted that motor excess and depreciation rates are being worked on to enable the industry has standardized format, adding that the committee has also initiated move for provision of adequate and genuine insurance cover for commercial cabs/buses plying public roads, which will be managed through a pool.

Director General, NIA Sunday Thomas, said the committee has collected some data, adding that effort is being made to add more to enable them have sizeable number that can give a reliable figure in terms of rating of different classes.

He said: “I am aware that they have been able to collect some data, and they are trying to add more, so that they can have sizeable data that can give a reliable figure in terms of rating of different classes.”

He said aside determining the minimum rates for all classes of insurance, the committee is also charged with the responsibility of recommending sanctions for non compliance with the rates.

The challenge of rate cutting has been the bane of the industry, as past administrations could not tame the monster.

Former Chairman, NIA, Olusola Ladipo-Ajayi, once said the menace of rate cutting is one of the dark spots in his tenure.

“I did not succeed in that regard. That is the simple truth.  It is a pity” he said. 

He noted that the industry is its own worst enemy, because operators have allowed competition to driven down prices, adding that with the continuous fall of rates, businesses are now unprofitable.

“We are running ourselves below profitable level due to pressure in the competitive market that is why we cannot grow beyond what we are doing at present,” he added.