The number of motorists with genuine motor insurance covers in Nigeria has reduced by 41.86%, from 4.3 million in February 2016 to 2.5 million by September 2019, Nigerian Insurers Association (NIA) disclosed.
NIA disclosed that about 2.5 million vehicles were registered on the Nigerian Insurance Industry Database (NIID) against the 4.3 million vehicles registered on its platform.
In January 2019, the association disclosed that just over three million vehicles were still on the platform when it introduced its USSD verification code.
It, however, expressed concern over the drop in the number of those taking genuine insurance.
What it means
Many motorists endanger the lives of other road users by driving their vehicles on Nigerian roads without appropriate insurance certificates.
Instead of procuring valid certificates that would provide insurance cover and compensation for road users after an accident, a large number of motorists buy cheap and fake papers from fraudsters in unauthorised areas.
The Chairman, NIA, Mr Tope Smart, had said, “The USSD is a Global System for Mobile Communication technology used to send text between a mobile phone and an application programme in the network. It works independent of Internet connectivity
While explaining further, he said a motorist could send SMS on any network using the code “*565*11#.
He said motorists could verify their motor insurance for a fee of N20 using “*565*11#” to any network without having Internet network on the phone.
He recalled that in 2010, the association introduced the NIID to eradicate fake certificates, and it went live in 2011.
According to him, the NIID is intended to serve as an authentic database of the Nigerian insurance industry data and to provide qualitative statistics/analysis of the industry data.
It is also to serve as a vehicle for easy verification of genuine insurance certificates by all stakeholders and to reduce the incidence of fraudulent insurance transactions especially for motor and marine policies.
What experts say
The Group Managing Director, Mutual Benefits Assurance Plc, Dr Akin Ogunbiyi, attributed the high rate of fake motor insurance papers to inaccessibility of the insurance companies.
He said, “Go to the core North and even in some places in the South West, how many insurance companies have branches there? Go to some rural areas, what is the means of transport there? But if you are not accessible and available, they will go for fake insurance papers.”
Ogunbiyi observed that many Nigerians with fake papers obtained them just to show to the police that they had complied with the insurance requirements.
The Managing Director, Law Union & Rock Insurance Plc, Mr Jide Orimolade, attributed the patronage of the cheap fake papers to low awareness of insurance.
“Awareness of the relevance of genuine insurance is low and enforcement is still a challenge, but it is improving now,” he said.