Nigerian Insurance Body Introduce Database System

In a bid to eliminate fake insurance, unethical practice and also instituting a robust industry database in Nigeria's insurance industry, the Nigerian Insurers Association (NIA), on Thursday unveiled the Nigerian Insurance Industry Database (NIID).

Disclosing this in Lagos to enumerate some of its achievements in 2011, the Chairman of NIA, Mr. Olusola Ladipo-Ajayi, said the information technology based system will facilitate easy collation and dissemination of statistical and also serves as a vehicle for easy identification of genuine insurance documents by relevant authorized persons.

He also disclosed that 500,000 Mobile handheld devices will be disbursed to law enforcement agencies nationwide for stop-check verification of motorists’ vehicle insurance status.

According to him, the data base will reduce incidences of fraudulent insurance transactions and policies most especially for motor and marine policies and also help to monitor and authenticate insurance transactions documents in the country.

The NIA Chairman, who doubles as the Group Managing Director of Lasaco Insurance Plc, said that the data base will also go a long way in reducing red tape and corruption by integrating with the vehicle registration system of the Federal Road Safety commission (FRSC), the Police, and other relevant government agencies.

He noted that the National Insurance Commission (NAICOM), the Nigerian Council of Registered Insurance Brokers (NCRIB) and the law enforcement agencies in the country had all signified sufficient interest in ensuring the acceptance of the system as the industry’s database. He said that policy holders can now check their motor insurance policy status via SMS and the Internet.

But in a new twist to the landmark move,  majority of the insurance companies have refused to embrace the common data base of the Nigerian Insurers Association, NIA. These companies are not ready to submit information on their business for use by the database because they are afraid of losing their businesses to other competitors.

Consequently, there are fears that the proposed Nigerian Insurance Industry Database (NIID) solution being put in place by NIA for the nation’s insurance industry looks set to fail and may never become a reality as the required data to make it work has not been forthcoming.

The centralised database intended to be a repository of all the insurance industry data, was scheduled to go live during the third quarter of year 2011, but the latest information is that the project has hit a brick wall. Although the Chairman, Information Technology Committee of NIA, Olawale Adedokun, in the committee’s report to members of the association in June 2011 had informed that the system was currently undergoing pilot test run, the NIA appeared to be handicapped as the operators were not cooperating with the association.

The operators argued that since the NIA failed to make the market agreement of ratings work, the ability of the self regulatory body to successfully coordinate the database project is in doubt.

Considering the cut-throat competition in the industry which has made the operators to indulge in the unethical practical of rate cutting, the operators expressed fears that disclosing information on their business to other insurers would amount to giving them opportunity to hijack their businesses.

Courteville Investment, listed in the Commercial/Services Sector of the Nigerian Stock Exchange (NSE) is partnering the NIA to provide the database solution.

Courteville’s Executive Director, Strategy and Projects, Femi Niyi, said “Courteville Investment Plc has been contracted as an Information Technology (IT) solutions provider to design, develop and manage a centralised database solution for NIA.”

Apart from serving as authentic repository of the nation’s insurance industry data, the system is also intended to support the production of Insurance Certificates (initially for Motor and Marine) that are verifiable and traceable at the point of issuance and also at any point during its life cycle to the centralised database.

Another aim of the centralised database is to provide mechanisms for the verification of Insurance Certificates issued or presented as evidence of insurance for Motor and Marine at the first instance and then other classes of insurance.

Besides, it is expected that the solution will help in providing qualitative analysis of industry performance and serve as source of historical data for benchmarking, while also enabling the financial information of NIA members to be rendered electronically for ease of analysis.

By the time the centralised Insurance Database Solution becomes fully operational, it is expected that it will help in eradicating fake insurances, minimise multiple fraudulent claims and most importantly provide authentic, qualitative and comprehensive data on insurance for national policy formulation.