‘Why insurance claims profile is on the rise’

RISING level of awareness on the benefits of insurance and the rights of policyholders to claims in the event of losses, are some of the reasons insurance managers say are responsible for the increase in claims liability in the industry.

Insurance mangers told The Guardian that the rise in claims payment over the past few years was an indication of the confidence of the insuring public in the market, an understanding of the importance of insurance as hedge against uncertainties and risk, hence policyholders now put up claims application on the least misfortune which in the past they would have ignored.

For instance, the Nigerian Insurers Association (NIA) – the umbrella body for the underwriting companies – in a release signed by the Director General of the Association, Sunday Thomas, on claims profile paid by members indicated that N70.71 billion claims was paid out in 2011, it rose to N72,209 billion in 2012, it went up to N89.945 billion in 2013, while industry sources predicted that in 2014 the market may have paid between N90 to N100 billion to individuals and corporate policyholders.

According to NIA, life assurance portfolio took the lion share of claims payment in the market in 2012, it recorded N36.31 billion, motor vehicle business took the second position with claims settlement of N12.97 billion, general accident took N9.69 billion, oil and gas portfolio claims amounted to N5.53 billion, marine and aviation took N4.26 billion; miscellaneous services recorded N3.27 billion payment, fire accidental risks took N1.0 billion claims, while workmen compensation recorded N173.82 million claims.

Thomas in his remarks said that claims payment in the industry has been on the increase because many Nigerians are becoming increasingly award of the benefits of insurance, the confidence level has grown significantly, and for the fact that underwriting companies has maintained utmost good faith in claims administration in the industry. According to him, the insurance companies have an obligation to restore clients to good standing after a loss.

He said “The NIA encourages member companies to pay all genuine claims expeditiously and the compliance level has been tremendous. The association in recognition of possible disputes established a Consumer Complaints Bureau (CCB) headed by a retired judge of the Supreme Court. The Bureau is completely independent of the association. It has been performing satisfactorily to the satisfaction of members and our customers”.

The Managing Director/CEO, STACO Insurance Plc, Sakiru Oyefeso, in his remarks said claims profile has been on the increase because insuring public are becoming more enlightened and sophisticated on their rights. Besides, I think the robust enforcement by the regulators have also made serious impact because of the zero tolerance of the regulators on claims settlement. In my company, it is part of company’s policy to attend to prompt processing and settlement of genuine claims that are reported to the company.

According to him, this align with our strategic objectives of being the first choice provider of superior financial services to all stakeholders, the company is at all times seeking to add value proposition to the customers needs, particularly in the area of service delivery and meeting obligations to all our clients.

He said that it is our strategy to constantly restore that customer to their exact position they were before the occurrence of loss.

An industry chieftain said that the insurance industry still represents an important component in the financial intermediation chain and remains the backbone of Nigeria’s risk management mechanism.

According to him, “Insurance still remained the engine room for the economic survival of any country that is, insurance exists for the survival of other businesses. The relevance of insurance to national development, it was not surprising as the reduction of effects of uncertainty and volatility helped companies operating in the sub-sectors to smoothen the economic circle and reduce the impact of crisis situation on the micro and macro levels. The industry needs the support and encouragement of the public and government to meet challenges in the industry.”


Source: Guardian News