Some Life Insurance companies in 2016 paid huge net claims which gulped their net premium income, it was reliably gathered.
Data obtained from the Nigerian Insurers Association (NIA) revealed that firms like Ensure Insurance Plc, had a net premium income of N661.48 million and paid net claims of N735.87 million; Cornerstone Insurance Plc. netted N1.45 billion and paid N1.57 billion; Great Nigeria Life Assurance Limited, netted N858.78 million and had Net claims of N1.21 billion. Three other firms had net claims higher than their net premium income.
Industry leaders like Leadway Assurance Company Limited, where on the positive corner. The firm posted net premium income of N31.40 billion and paid net claims of N12.54 billion; AIICO Insurance Company Limited, netted N18.48 billion and paid N11.31 billion while Custodian Life Insurance Limited, netted N11.97 billion and paid N3.78 billion.
According to an operator, the negative situation arises mainly when a company’s life portfolio mix is skewed towards group life only and when the company does not have a large pool of even the group accounts.
The operator noted that the challenge to underwriters is to ensure they have a balance of large, medium and small clients in their group life portfolio and also to ensure a balance of group and other life products like endowment policies, term life amongst others.