The Nigeria Employers’ Consultative Association (NECA) has said that an adjustment in the current premium rate for motor insurance is desirable in order to grow the economy.

NECA’S Director General, Mr Adewale-Smatt Oyerinde, made this known in an interview with the News Agency of Nigeria (NAN) on Saturday in Lagos.

NAN reports that the National Insurance Commission (NAICOM) had announced a new policy in a circular titled: New Premium Rate for Motor Insurance with number: NAICOM/DPR/CIR/46/2022, signed by its Director, Policy and Regulation, Mr Leo Akah.

With the new policy, third-party motor insurance policy will be increased from N5, 000 to N15, 000, with effect from Jan.1, 2023.

This is among other increases in rates contained in the circular.

Reacting, Oyerinde said, “In order to grow the economy, develop the Industry and provide effective risk-mitigating services to the generality of Nigerians, it is our belief that a marginal adjustment in the current rate is desirable”.

The NECA boss noted that the commission reserved the right, as provided in the extant law, in reviewing the rate.

He, however, said it was imperative for NAICOM to always carry stakeholders along in such review, especially with the timing.

“It is worthy of note that the current rate has been in existence for over five years, while the cost of motor vehicles has increased exponentially.

“Coupled with the general price increase of goods and services, the commission can be justified if there are guarantees for improved service delivery and a higher response rate from insurance companies, “ he said.

Oyerinde decried the low rate of insurance awareness in the country.

He, therefore, urged NAICOM to deepen engagement with critical stakeholders in order to promote the insurance culture in Nigeria and also get buy-ins for its Policy actions.

“In developed climes, the insurance industry plays a major role in National Development as it serves as risk off-takers in cases of accidents and other mishaps, “