USSD code for motor insurance undercuts rate

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By Favour Nnabugwu

Third-party liability motor insurance sales through the Unstructured Supplementary Service Data (USSD), channel, otherwise known as mobile insurance, are being undermined by rate cutting.

This is due to the fact that some insurance companies still sell third-party motor policies below the standard price of NGN5,000 ($13.12).

The USSD is a simple self-service solution that enables car owners/users to purchase authentic third party motor insurance via their mobile phones.

The platform guarantees customer convenience, easy and secure access, real-time interaction and speedy service.

Consequently, most customers would rather buy at the reduced rate than through the USSD channel.

The Nigerian Insurers Association (NIA) took a bold steps in the fight against fake motor insurance policy in Nigeria as it launched the Unstructured Supplementary Service Data (USSD) code *565*11# that would enable motorists verify the authenticity of their insurance policies.

The former Chairman of the NIA, Mr Tope Smart, at the launch in Lagos, said the device was designed to bring insurance closer to the people and ultimately eliminate fake insurance certificates in the market.

He noted that in 2010, the association took a major step towards eliminating fake insurance certificates in the market, as it initiated the Nigerian Insurance Industry Database (NIID), stressing that the database went live in 2011 and insurance policies obtained by motorists could be checked real time online on the internet and through dedicated hand held devices

He said the objective of the NIID is to serve as an authentic database of the Nigerian insurance industry, providing qualitative statistics/analysis of the industry data, as well as a vehicle for easy verification of genuine insurance certificates by all stakeholders and to reduce incidences of fraudulent insurance transactions, especially for motor and marine policies.

Smart posited that the industry has continued to reap the benefits of the scheme, adding that prior to the establishment of the platform, cloning and faking of insurance certificates was a thriving business, but the establishment of the database has assisted the industry in reducing the incidents of fake insurance certificates in the market and that presently, there are over three million vehicle details on the platform.

“The NIID platform had been operational nationwide, but with challenges in verification in areas with poor internet coverage.

Verification of motor certificates through the dedicated devices became highly impaired due to the vicissitudes of internet operations in the hinterlands. This led to the introduction of the USSD technology.

“The USSD is a Global System for Mobile Communication (GSM) technology used to send text between a mobile phone and an application programme in the network. It works independent of internet connectivity. In this instance, any mobile phone (not necessarily a smartphone) would communicate with the NIID system to retrieve policy status whenever required.
“It is hoped that with the USSD, we would have fully overcome the problems associated with the dedicated devices as it guarantees uninterrupted service throughout the country and on all networks. Our existing and prospective customers now have the opportunity to confirm the genuineness of their respective policies at the time of purchase to avoid any embarrassment should claim occur,” he said.

The Acting Managing Director, Nigeria Inter-Bank Settlement System, Niyi Ajao, said the device will assist motorists in acquiring genuine policies and getting claims whenever there is problem with their insured vehicles.

He said the device operates on platforms of the major mobile telecommunications providers in the country, stressing that it is a win-win for insurance operators and motorists.

Managing Director, Courteville Business Solutions Plc, Dr. Adebola Akindele, said there is huge insurance potentials in the country and urged insurers to take the campaign on the device to states where there are presently less enforcement and millennials who are mostly consumers of technological devices.

He told insurers to redouble efforts in ensuring that the number of insured vehicles surpass what it is presently.

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