Insurers pay N327.5b claims, predict rise in liability profile
THE nation’s insurance industry paid N327.5 billion claims to individuals and corporate policyholders in the past four years ending December 2014.
The industry, however, wrote a gross premium income of N1.063 trillion in the same period under review.
According to statistics released at the weekend by the Nigerian Insurers Association (NIA) – the umbrella body for the underwriting companies – on the quantum of claims profile paid by members of the association for the period indicated that the underwriting firms paid N70.71 billion claims in 2011, it rose to N72.209 billion in 2012, an increase of two per cent, it went up by 24 per cent in 2013 to N89.95 billion, and rose to N94.61 in 2014, an increase of five per cent.
According to the class of business underwriting by the insurers in 2013, life portfolio led in claims profile with N34 billion claims payment, closely followed by oil and gas business with claims of N13.81 billion, while motor portfolio claims amounted to N13.72 billion, among others.
The association in a statement said insurance companies have an obligation to restore clients to good standing after a loss. The association encourages member companies to pay all genuine claims expeditiously.
The Director-General of the Association, Sunday Thomas, explained that the association in recognition of possible disputes established a Customer Complaints Bureau headed by a retired judge of the Supreme Court, the bureau is completely independent of the association. The principle objective of the bureau is to ensure that all parties to insurance transactions are fairly treated while their rights are preserved. The bureau is an alternative dispute resolution mechanism which is unbiased, transparent and result-oriented. The aim is to promote sound professional ethics and best practices.
On challenges in the industry, the NIA boss said the performances of the insurance companies have not been bad notwithstanding challenges in the business environment, liquidity freeze, mounting claims profile in the mist of declining premium, which has negative effects on the bottom line of underwriting companies.
Thomas said: “Insurance still remained the engine room for the economic survival of any country, insurance exists for the survival of other businesses.
Therefore, the industry need the support and co-operation of government at all levels and the general public for the industry to carry out the enormous responsibility efficiently.
“The relevance of insurance to national development was not surprising as the reduction of effects of uncertainty and volatility helped companies operating in other sectors to smoothen the economic circle and reduce the impact of crisis situation in their operation”.
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