How insurers’ N97.2b claims settlement boost market penetration
Modern insurance claims process is increasingly complex. More variables and data are constantly coming into play, but carriers must determine appropriate settlements and flag potential fraud faster than ever.
Aside technical challenges, insurers are also dealing with customers during stressful and vulnerable moments, especially at pandemic times when the delicate balance of empathy and automation must be struck to give the insured the peace of mind they seek
The shift to a mostly-automated claims process will likely take a decade, as the initial steps in the core claims system transformation process are very long.
Despite worries about another round of recession in the economy due to the negative impact of the pandemic that is mitigating the global economy, a few insurers underwriting risks across the country were able to settle N97.2 billion cumulative insurance claims to victims, who suffered a loss.
An insurance claim is a formal request by a policyholder to an insurance company for coverage or compensation for a covered loss or policy event. In many cases, third-parties file claims on behalf of the insured person, but usually, only the person(s) listed on the policy is entitled to claim payments.
The underwriting companies include; Leadway Assurance Company Limited, AIICO Insurance Plc, FBNInsurance Limited, FBN General Insurance Company, Sovereign Trust Insurance (STI) Plc, NEM Insurance Plc, Wapic Insurance Plc, and Linkage Assurance Plc.
These insurers have recently done Virtual 2019 Annual General Meetings (AGMs) and their 2019 financial statements, explained that beneficiaries of these claims were those who had subscribed to insurance policies prior to the occurrence of the risks.
The claims paid ensured that the claimants were returned to the financial position they were before the disasters struck.
The breakdown of the claims paid show that Leadway Assurance paid the highest with N38.5 billion claims last year, against the N33.9 billion it paid in its 2018.
This was followed by AIICO Insurance, which paid claims worth N30.6 billion in 2019, a six per cent increase above the N29 billion paid in 2018, while FBNInsurance came third with N9.9 billion, a 130 per cent improvement over the N4.31 billion paid in 2018.
In the fourth position is NEM Insurance Plc, which paid gross claims of N7.4 billion, a 22.7 per cent increase to the N6.01 billion paid in 2018 financial year,
Similarly, Wapic Insurance paid N4.1 billion, while Sovereign Trust Insurance (STI) Plc paid N2.2 billion as claims in the 2019 financial year.
FBN General Insurance Limited paid N2.3billion as claims, even as Linkage Assurance Plc paid about N2.2 billion as claims in the year under review.
Speaking on claims payments, a former Chairman, Nigerian Insurers Association (NIA), Tope Smart, noted that although there have been a series of complaints of claims default against some insurers, NIA as an association is addressing this issue by advising operators on the need to promptly pay genuine claims.
He stressed that claims settlement instils trust in the mind of the people, increases insurance patronage, thereby deepening penetration.
Also, a former President, Chartered Insurance Institute of Nigeria (CIIN), Eddie Efekoha, had said, insurance operators have improved in the area of prompt payment of genuine claims, noting that honouring claims obligations is the reason why underwriting firms exist.