The Nigerian insurance regulatory body NAICOM is reportedly planning to create a new framework for insurance pricing in the country to ensure risks are adequately priced over concerns that current rates are unsustainable, according to Vanguard.
An anonymous source told Vanguard; “If you look at some of the key accounts in the industry, you will find out that the claim ratio is more than 200 percent.
“Unfortunately, at renewal, the insurers will charge a rate lower than the previous year. Such occurrences have prompted the regulator to take the issue of pricing serious which is one of the things that the regulator will look at next year.”
Another anonymous operator said; “we are going to start charging the right premium rate from next year because one of the things that is affecting us is that we are not charging the right premium rates.
“Operators have held series of meetings with the regulator as regards that and NAICOM has set a target on premium for the industry going forward.’’
In addition to ensuring adequate re/insurance pricing, a recent focus of the Nigerian federal government, together with Africa Re, and the World Bank, has been on improving insurance penetration levels among farmers through affordable insurance packages.
Increased agricultural insurance penetration is expected to play a crucial role in driving the Nigerian federal government’s agricultural transformation and financial inclusion agenda – thus the country represents a growth opportunity for re/insurers in coming years.
As a fast-growing country with a population of 180 million, the potential for the personal and life insurance market share is still largely untapped by re/insurers.
