Insurers eye N30b on higher third party motor insurance

• Published date: 16 January 2023
• Publication title: Nigeria - The Nation

Insurance companies' portfolios may grow this year going by the new increase of third-party motor insurance premium rate from N5,000 to N15,000.

Findings by The Nation have shown that the insurers may generate premium income of over N30 billion if they maintain sales of two million policies sold in 2021.

The insurers in 2020 made premium income of N47.96 billion on motor insurance business, which include third-party motor and comprehensive motor insurance.

Meanwhile, claims ratio will rise on the third-party motor with policyholders getting three times benefits from claims.

Third Party Motor Insurance is one of the compulsory insurance policies that any motor vehicle owner is required to have.

Last month, the National Insurance Commission (NAICOM) approved a new premium rate for Third Party Motor Insurance policy to N15,000 as against N5000 they were paying.

According to the commission, the increase in rates became inevitable going by rising inflation.

Consequently, private vehicle owners are covered with N3 million for Third Party Property Damage (TPPD). It is the limit of claims an insured can enjoy on the policy.

This means that the third party's vehicle would be repaired with N3 million, instead of N1 million.

In the same vein, the premium for staff bus has risen by to N20,000 with a TPPD of N3 million; N5 million limit for goods, with premium of N20,000.

Commercial vehicles, trucks/general cartage has TPPD limit of N5 million with a premium cost of N100,000; Special...