Insurance Stocks Surge Strongly After Reform Announcement
Nigerian underwriters and insurtech partners are piloting usage-based (pay-as-you-drive) motor insurance, linking premiums more closely to real driving behavior. The move is aimed at improving affordability, rewarding safer drivers, and reducing fraud through better data.
How usage-based cover works
- Data sources: odometer readings, mobile telematics, or OBD devices to capture mileage and driving patterns.
- Pricing: base premium plus a variable component that adjusts with actual kilometers driven and risk profile.
- Customer control: app dashboards show monthly usage, savings, and tips to keep premiums low.
For motorists who commute less or drive primarily off-peak, usage-based pricing can deliver meaningful savings versus flat-rate annual policies. It also encourages safer habits by surfacing harsh braking, speeding, and night-driving exposure.
“When price reflects actual risk and usage, adoption rises and claims outcomes improve.”
Market Insight — Lagos
What motorists should know
- Confirm what data is collected and how it’s used; review the privacy policy.
- Ask about minimum monthly charges and how prices adjust with mileage.
- Check repair networks and claims timelines remain the same as standard policies.
Rollout will be phased as insurers refine pricing models and customer experience. Expect to see usage-based options offered alongside traditional third-party and comprehensive policies through agents, bancassurance, and digital channels.
