Nigerian Insurers Association Unveils Centralized Database To Eliminate Fraud

Nigerian Insurers Association Unveils Centralized Database To Eliminate Fraud

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.


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One thought on “Nigerian Insurers Association Unveils Centralized Database To Eliminate Fraud

  1. An intelligent national address data underpinned by geography could form the bedrock of other data that can underpin consistent and efficient risk and fraud management in Nigeria. Insurers with access to this geographic data would be empowered to investigate and analyze insurance risks using the compelling power of location or geography. E.g. members of Nigerian Insurers Association (NIA) could profile vehicle theft claims across Nigeria based on geography to reveal the relationship between risk and location.

    In countries where such intelligent geographic data does exist, it had been proven that geography plays an important role in managing risk profiles. In UK the premiums paid on vehicle insurance, vary according to location. This variation manifests in weighted values applied to postcodes. This means that an insurance premium paid by policy holder varies according to the postcode.
    This also applies to other forms of insurance products such as house content insurance, insurance against fire or damage, etc. Risk patterns are best analyzed using geographic data as they provide a robust platform to understand and appreciate relationships within data that hitherto would have been impossible to spot using traditional tabular or textual methods.

    Unfortunately, Nigeria’s addressing system is currently dysfunctional, chaotic and very primitive. We relate addresses to a major landmark because there is no functional mechanism on ground to introduce uniqueness in addresses. This therefore makes it extremely difficult to manage risks effectively. It is very common for someone in Lagos to give his address as 14 Tiamiyu Salvage Road, behind the fire station near Ojuelegba. Although there is nothing inherently wrong in relating an address to a major landmark, it however makes it extremely difficult when your commercial business like Insurance depends on spatial element of your customers’ addresses.

    Our current postcode data is not intelligent enough to be used by any other person or organization outside NIPOST. In my blog, I wrote about an evaluation of the postcode, In this post, I discovered that Allen Ave in Ikeja and Karonwi si in Itire, Surulere share the same postcode 100281. The 2streets are 11.3km apart yet they sahre the same postcode. I am sure that there are over 200,000 houses between the 2streets. The implication f this is that all these 200,000 houses have the same postcode, how intelligent can that be? (see

    This is an opportunity to do things differently within Nigerian Insurance industry using innovative geographic data. An opportunity for Nigerian Insurance industry can anchor their own risk data effectively.
    This means that postcode and National Address System has tremendous national importance going beyond just mail sorting or delivery for NIPOST.

    Here is an article on how we can create a national address database for Nigeria with Geographic coordinates

    This link explains how Allianz uses a range of detailed mapping and addressing products in their system for risk management


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