N40bn lost yearly as 8million tricycles, motorcycles uninsured

By ABDUL OLALEKAN

Insurance industry in the country is losing about N40 billion on a yearly basis to an estimated 8 million tricycles and motorcycles who ply Nigerian roads without genuine insurance cover, Business247 News Online investigations have revealed.

Since 2010, there has been an influx of tricycles, popularly known as Keke Napep and motorcycles known as okada as means of transportation in most urban cities and rural areas across the federation, following a surge in the rate of unemployment as most people cater for their livelihood through this means.

Despite this influx, insurance companies are unable to sell their products and services to these transporters, as the owners refused to buy insurance cover despite the fact that they are covered under the 3rd Party Motor Vehicle Insurance Act.

Third Party Vehicle Insurance comes at a fixed price of N5,000.

This means that despite losing N40 billion on a yearly basis from 8 million tricycles and motorcycles, taking into consideration the fact that a 3rd party insurance costs N5,000, from year 2010 till the current year, insurance industry might have lost a huge N240 billion from non-insurance of these means of transport.

The reason for the continuous neglect of insurance cover by these transporters, findings show, was because the law enforcement agencies are too lenient with tricycles and motorcycles owners, focusing more on vehicles for insurance enforcement.

Even the few Keke Napep and Okada that probably have insurance, from findings, have fake insurance papers.

With no enforcement, the riders continue to have a free day, bothering less about having cover, especially, as they are unaware of the benefits of insurance.

A Keke Napep operator who shuttle between Abule-Egba area of Lagos State to Giwa area of Ogun State, confided in Business 247 News Online that he and his colleagues don’t bother about insurance papers because they have never, at one point, been crucified for not having it.

A check carried out by our correspondent within the Lagos metropolis at the weekend, shows that the Vehicle Inspection Officers (VIOs) are only stopping vehicles that have no complete vehicle documents, insurance inclusive, passing Keke Napep and Okada that came in the process without any checks.

In an exclusive interview with Business 247 News Online, Director General, Nigeria Insurers Association (NIA), Mr. Sunday Thomas, though attributed the development to low insurance awareness in the country; he noted that the major problem has to do with lack of enforcement, confirming that Keke Napep and Okada were covered in the Insurance Act.

According to him, “On the motor vehicles, we still have majority not having genuine insurance, not to talk of millions of Keke Napep and Okada across the country. They are all motor vehicles under the 3rd party motor vehicle Insurance Act. They are also expected to get cover, but the capacity of the law enforcement agents again might be responsible.”

He urged the law enforcement agencies comprising of the Federal Roads Safety Corps (FRSC), Vehicle Inspection Services (VIOs), among others to assist the insurance industry to implement this insurance as the industry cannot enforce it by itself.

“It’s a combination of sensitisation. Just create the awareness. First and foremost, start with the awareness before you start to enforce by making someone, a scape goat,” he pointed out.

Corroborating further, the Immediate Past Managing Director, LASACO Assurance PLC, Mr. Olusola Ladipo-Ajayi, said the inability of law enforcement agents to enforce the purchase of insurance by Okada and Keke owners have continued to deny insurance operators billions of Naira yearly.

He noted that insurance companies parade good products for Keke and Okada riders, but lack of enforcement has made the parties not to buy the products.

He disclosed that prior to now, when the laws were enforced, the parties where buying the products, but now they drive with no insurance cover, because they are not compelled to buy.

He urged the government to support insurance by enforcing the procurement of compulsory insurances, adding that the insurance operators cannot be selling products and at the same time carry out enforcement.

When asked whether he is aware that most tricycles and motorcycles have no insurance cover at all, the VIO Spokesperson, Lagos State, Mr. Gbolahan Toriola, said his inspectorate will conduct investigation on the matter to ascertain the genuineness of this claim, promising to address it, if found to be true.

‘They (Keke Napep and Okada) are equally covered by law.  We will do our investigation on this,’ he stressed.

The President, Progressive Shareholders Association of Nigeria (PSAN), Boniface Okezie, on his part, urged insurers to reach out to okada riders and Keke drivers, advising them to get the parties to buy insurance as it would enhance the premium base of the industry and by extension, shareholders.

Section 38 of the National Insurance Act 2003, currently in use, states that Third Party motor Insurance is required as part of the minimum amount of auto cover road a user must carry. Penalties for non-compliance can include a fine of up to ₦250,000 and/or one-year imprisonment.