Insurance sector pays N376bn claims to policyholders

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Underwriting firms in the insurance sector of the nation’s economy have paid N376 billion as provisional claims to policyholders who suffered insured risks in 2019.

The beneficiaries of the claims had insured their buildings, office premises, vehicles, and lives, among other assets against mishap and were duly paid when the risk occurred.

The claims paid was about 200 per cent increase from N193.48 billion paid to claimants in the 2018 financial year to N376 billion paid in the last financial year.

The increase, according to findings, was as a result of improved awareness among the insured to always lodge claims when risk occurs as well as the consistent rise in asset replacement value that has continued to erode the large portion of their premium income.

Similarly, data obtained from the Nigerian Insurers Association (NIA) revealed that life operators within 2014 and 2018 paid N315.47 billion claims, while non-life operators within the same period paid N332.69 billion.

A breakdown of the claims shows that life operators paid N35.95 billion, in 2014; N50.57 billion, 2015; N61.87 billion, 2016; N72.30, 2017; N94.78 billion, 2018, while non-life operators paid N51.06 billion in 2014; N54.65 billion, 2015; N57.76 billion, 2016; N70.52 billion in 2017 and N98.70 billion in 2018.

Speaking on this development at a retreat for members of the House Committee on Insurance and Actuarial Matters in Uyo, Akwa Ibom State on Monday, the Acting Commissioner for Insurance,Sunday Thomas, confirmed that the insurance industry in 2019, had a provisional gross premium income of N490.99 billion; claims of N330.37 billion, premium retention of N376.07 billion and invested N1.13 trillion

According to him, there is no denying the fact that there are indeed some cases of delays in the payment of claims by some operators, the Commission, he said, is, however, addressing such cases as soon as they are brought to its notice.

This, he added, was the reason why the Commission has strengthened its Complaint Bureau Unit in order to effectively address consumers’ complaints within the shortest possible time.

NAICOM, he stressed, has, also, as a matter of deliberate policy, adjusted its strategy to focus more on developmental issues than compliance issues going forward in the overall interest of all stakeholders.

He said the foundation to ensure successful implementation of its initiatives in this regards its being laid.

“In 2009, the Commission launched the Market Development and Restructuring Initiative (MDRI) project aimed at a comprehensive pursuit of development of the industry as well as ensuring full compliance with extant Laws in respect of compulsory insurances. The first phase of the project was successfully carried out in all the six geo-political zones in the country.

The second phase of the MDRI project will soon be unveiled and it will mark out clear targets and tasks for all stakeholders in the industry. The Commission is committed to vigorously pursue the continued implementation of Compulsory Insurances to which collaboration and support from all stakeholders is key towards achieving the desired goal,” Thomas said.

 

L.Nasir