The National Insurance Commission on Saturday cautioned insurance operators against rate cutting in 2019.
The Deputy Commissioner for Insurance, Technical, Sunday Thomas, issued the warning in an interview with the News Agency of Nigeria in Lagos.
Thomas explained that the industry’s target of N1 trillion premium by 2020 may fail due to rate cutting by some operators.
NAN reports that rate cutting is a process whereby a lower premium is accepted from an insurance policy holder than the amount stipulated by the insurance industry regulator, NAICOM.
Thomas said some operators might derail the N1 trillion target through the reduction of statutory premium.
Thomas said: “There was a point that the third party Insurance premium was N5,000, but some operators were charging N1,000.
“This made third party Gross Premium Written to stand at N200 million that year.
“If the operators had charged the N5,000 statutory premium, what is the market likely to produce?
“I am just telling you why we are not at N1 trillion.
“Some operators violated NAICOM’s directive, which also hurt their own businesses.”
Thomas, however, urged insurance operators to desist from violating the rules governing insurance practise in 2019.
He urged NAICOM to be committed to pushing the industry to lofty heights, and also ensure government agencies pay the right premium to be able to make their claims.