New rate on fire insurance commences July 1 as brokers commend NAICOM on mkt devt

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A new calibration for the calculation of premium on fire insurance for the Nigerian market is to come into effect  on July 1, 2022.

The confirmation on the release of a new rate on fire insurance was made by the president of the Nigerian Council of Registered Insurance Brokers (NCRIB) Mr Rotimi Edu.

Mr.  Edu who made the revelation at a recent interactive session with newsmen in Lagos as part of events marking the commencement of activities for the celebration of NCRIB’s 60th anniversary said that the new rate was necessary as to enable the insurance industry apply commensurate rates on the risks which they carry.

According to him, insurance companies must be encouraged to rise to the occasion of indemnifying clients in the event of lose arguing that one of the sure ways of achieving the fit is through the application adequate rates on the premiums paid by clients.

It would be recalled that the Professional Reinsurers Association of Nigeria (PRAN) had late last year released a new premium rate on fire insurance but the move was greeted with strong opposition from both insurance companies and brokers leading to the suspense of the new rate.

But Mr Edu explained that insurance brokers were not totally against the issuance of a new and higher premium rates on fire insurance but that the brokers, just as in the case of insurance companies had problem with the timing of its effective date.

According to him, allowing the new fire rate to come into effect at that time would have impacted negatively on renewals since most the clients who are mostly corporate bodies had concluded budgets for their insurance needs at that time.

“Insurance brokers were not against the application of new rates on fire insurance but were against the timing and the risk of losing clients probably to foreign markets. We only asked for more time to enable us educate our clients”, Mr Edu further explained.

The NCRIB president commended the activities of the National Insurance Commission (NAICOM) saying that most of the regulations issued by the commission have helped in boosting the market just as they have ensured for more sanity among the operators.

“Regulations by NAICOM have brought a lot of changes in the market. They have broght sanity and for this and more, we commend the commissioner for insurance Mr. Sunday Thomas for his effectiveness. The campaign on compulsory insurance which is actively supported by NAICOM is helping to improve the market”, he added.

Mr Edu said that the Nigerian insurance industry is in consultation with other professional bodies in trying to find lasting solution to the incidence of building collapse in the country. He listed such professional bodies to include Architects and Surveyors.

“WE are urging them to factor the issuance of insurance policy on every building project as a precondition for their certification since no insurance company will issue a policy on any project if it was obvious that the building does not meet specific designs and requirements. Insurance company will never grant cover to a building which is not following specifications for fear of suffering heavy lose should the risk occur”, he reiterated.

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