Following the nationwide enforcement of the Third-Party Motor Insurance Policy, underwriting firms may realise over N142 billion in revenue from 9.5 million uninsured vehicles in the country by the end of this year.
A check in the insurance revealed that the 9.5 million uninsured vehicles will now be forced to part with N15,000 each as motor insurance premium, which amounts to over N142 billion, a development that will further increase the revenue base of the insurance industry in the 2025 financial year.
Third-party insurance is the minimum coverage compulsorily required by law for any vehicle on Nigerian roads, while Comprehensive Motor Insurance is optional and recommended.
Data sourced from the Nigerian Insurers Association (NIA) and the Federal Roads Safety Corps (FRSC) showed that 12 million vehicles are plying Nigeria roads of which only 3.6 million are insured, leaving 9.5 million vehicles uninsured.
Earlier in January, the Inspector-General of Police, Kayode Egbetokun, announced nationwide enforcement of third-party motor insurance from February 1, 2025.
Section 68 of the Insurance Act and Section 312 of the 1945 Motor Vehicle (Third Party Insurance) Act mandates all vehicle owners to possess third-party insurance.
The nationwide enforcement of the Third-Party Motor Insurance Policy is expected to limit the volume of fake insurance certificates, increase subscriptions to genuine insurance and increase insurance adoption in the country.
Prior, the Nigerian Insurers Association (NIA) said in one of the industry forums that the association recognised the immense potential of the enforcement to drive positive change in the insurance industry and the broader economy.
“With millions of vehicles on Nigerian roads, the move is expected to increase the number of insured vehicles, reduce the prevalence of fake insurance policies and create a more robust safety net for motorists and road users alike,” it stated.
The chairman of the association, Kunle Ahmed, noted that the initiative also aligned with his administration’s agenda to prioritise increasing awareness of the benefits of insurance, foster innovation within the industry and enhance partnerships with key stakeholders to strengthen Nigeria’s insurance.
As the enforcement takes effect, he assured the insuring public and other stakeholders that its members are fully prepared to provide seamless access to third-party motor insurance policies through authorized channels, ensuring that every Nigerian motorist can protect their risk and comply with the law.
“We will work closely with our members to ensure efficient service delivery, innovative products, and improved customer experiences,” he pledged. NIA believes the enforcement is a game-changer for the industry, as it will encourage greater public trust in insurance, reduce uninsured risks and stimulate economic activity.
“The NIA urged vehicle owners nationwide to take full advantage of this opportunity by obtaining their third-party motor insurance policies through licensed and authorised insurers. We can build a safer, more accountable and better-protected road network for all Nigerians,” he stressed.
