Policyholders Recoup N540bn Claims From Insurance Firms


Insurance policyholders across the country have recouped N540 billion claims from the insurance industry in the last five years after suffering insured risks, Eyes Of Lagos can exclusively reveal. The industry also generated N1.5 trillion premium income in the last five years, A year-on-year (Y-o-Y) analysis of the claims payment trend from 2013 to 2017 shows that there is a consistent progress in claims paid by the industry, even as more policyholders are now aware of how to claim when an insured risk occurs, unlike what it was years back. Within the period under review, findings show that non-Life Insurance companies paid N287 billion claims, while Life Insurers paid N253 billion, thereby bringing the cumulative claims paid by the sector to policyholders to N540 billion. In 2013 financial year, insurance sector paid N92.9 billion claims to claimants, out of which the non-life underwriters paid N38.6 billion, while life insurers paid N34.3 billion. By 2014, policyholders got N35.9 billion claims from life underwriters as well as N51 billion from non-life insurers, bringing the total claims paid for that financial year to N86.9 billion. At the end of 2015 financial year, the industry had paid N105.1 billion claims of which life outfits paid N50.5 billion, with non-life operators paying N54.6 billion compensation to policyholders. A cumulative sum of N119.5 billion was paid as compensation to claimants in 2016, wherein life insurance firms remitted N61.8 billion and non-life outfits paid N57.7 billion claims. While the total claims profile of the insurance industry in 2017 financial year could not be ascertained, with some underwriters yet to get regulatory approval on their accounts, market observers’ project that the industry could have paid N135 billion claims in the last financial year. Investigation by Eyes Of Lagos also showed that the benefiting claimants comprise of public and private companies, government at federal, state and local levels as well as individuals who have paid premium to insure their respective risks before they happened. Although most people have faulted the inability of some underwriting firms to pay claims as and when due, leading to low patronage of the insurance industry, things seem to have changed for better as insurers are now waking up to the reality that they will lose their customers if they refuse to promptly pay genuine claims. With incessant increase in volume of car crash, building collapse, fire incident in factories and market places, among other risks across the country, there has been continuous upsurge in the volume of claims in the last five years. Besides, increase in replacement value of insured assets, which is making underwriting firms to pay more to replace assets when risk occurs, could be partly responsible for the increase in claims value. Meanwhile, the insurance industry generated a whopping N1.5 trillion premium income in the last five years, despite the low insurance adoption and penetration in the country. In 2013, insurance companies made N267.8 billion premium income, generated N293 billion in 2014, made N312.4 billion premium income in 2015 and in 2016, the premium income of the industry was N315.8 billion, while the industry recorded N363 billion premium income in its 2017 financial year end. Managing director of AIICO Insurance Plc, Mr Edwin Igbiti, while speaking on the claims paid by the insurance sector in the last five years, said insurance companies exist to assume the responsibility of the premium they collect, which is the payment of claims. “We realise that we exist, not just to create wealth but to provide protection for our clients in return for premium payments,” he said. On his part, immediate past chairman, Nigerian Insurers Association (NIA), Mr Eddie Efekoha, said insurance operators have improved in the area of prompt payment of genuine claims, noting that the association has persuaded its members on the need to honour claims obligations, which according to him, is the reason why underwriting firms exist. He said the best form of insurance advocacy that operators can do is to pay claims, adding that the beneficiaries will spread the gospel of getting claims in insurance firms, thus persuading more people to pick up insurance policies. Efekoha who is also managing director of Consolidated Hallmark Insurance Plc said insurance operators would continue to live up to their claims responsibilities, noting that insurance should be considered first in decision making, especially now that it is difficult to replace lost items due to high replacement value. Accordingly, he advised his colleagues to publicise the claims they pay, as this will increase insurance awareness and acceptance. Managing director of Alpha Choice Insurance Brokers Limited, Mr Sunny Adeda, had earlier stated at a forum in Ijebu-Ode, Ogun State, that payment of claims as and when due remains the best way to deepen insurance penetration, even as it will persuade people to have trust in insurance firms. He disclosed that the industry had paid billions of Naira of claims that most people are not aware of, urging operators to henceforth increase publicity on the claims they pay.

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