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Fake insurance racketeers defraud insurers of N15bn annually

By on October 24, 2013

The Nigerian Insurers Association, NIA, has said that the insurance sector loses over N150 billion yearly to fake vehicle policies racketeers.

Director General of the NIA, Mr. Sunday Thomas, who revealed this said that of the over 12.5 million vehicles on the nation’s roads, only I.5 million have genuine insurance particulars, which are either comprehensive and are sold at 10 per cent of the worth of the vehicle or third party which are sold at N5,000.

Thomas said that about 1.5 million vehicle policies have so far been uploaded on the Nigerian Insurance Industry Database, NIID, which was designed to capture the data of all insured vehicles in the country.

He said, “So far, close to 1.5 million vehicles have been uploaded, which is still a far cry from our expectations. Our target is to upload all the vehicles in the country.

“One of the major objectives of the NIID is to capture the data of transactions within the market. In the past, this has been very difficult to get. We had people bouncing different figures all around, we want to put an end to that, and we need some time to do that.

“We will continue to update the record. There has not been any structured policy in the past to get figures of numbers of vehicles. We only transact in terms of the financial reports not the physical presence of number of vehicles. We are looking at a situation where we would be able to say this is the number of lives and vehicles insured in Nigeria.

“If you ask me today about the number of insured vehicles in the country, I would tell you that they are about 1.5 million, because that is what I can account for and have on my system.”

Meanwhile, the Group Managing Director of Mutual Benefits Assurance Plc, Mr. Akin Ogunbiyi, also said that of all the vehicles plying Nigerian roads, 90 per cent of the third party are fake papers.

Ogunbiyi said “We have 12.5 million vehicles on Nigerian roads according to statistics, outside Okadas and tricycles. If you want to achieve the objective of Market Development and Restructuring Initiative, MDRI, increasing insurance contribution to the Gross Domestic Product (GDP), this aspect of insurance that is compulsory is in the hands of touts and we are losing income on daily basis.”