Matthew Otoijagha
Nine underwriting companies have paid a cumulative N76 billion claims to policyholders who suffered insured risks in 2018 financial year, it has been leant.
This was an improvement from what was witnessed in the 2017 financial year as virtually all the nine companies recorded an increase in claims paid in their latest financial year. The increase in claims volume, according to findings, is connected to the rise in replacement value of insured assets, as insurers have to pay through their nose to replace insured assets when risks occur, at a time the premium is too meager compared to the claims value.
Moreover, increased awareness on the need for policyholders to make claims is partly responsible for this increase. Further investigation shows that most of the nine insurers had to relinquish about 70 per cent of their income to pay these claims, thereby, leaving them with just 30 per cent profit.
The concerned companies are: Leadway Assurance Company Limited, AIICO Insurance PLC, NSIA Insurance Limited, Universal Insurance Plc, Sunu Assurances Nigeria Plc, African Alliance Insurance Plc, Nigerian Agricultural Insurance Corporation (NAIC), FBNInsurance Limited and Consolidated Hallmark Insurance Plc.
Market analysts expect the claims payment of the insurance industry to rise above N200 billion, by the time the claims figure of the remaining 48 insurance companies are made public. Of the nine underwriting firms, Leadway Assurance Company Limited paid the highest with N33.8 billion claims to claimants in its 2018 financial year, having paid N27.4 billion claims in its 2017 financial year.
To this end, Leadway paid a cumulative N61.2 billion as compensation to its clients who suffered insured risks in those two years, in an industry that some would have declined to pay this huge claims, by giving series of excuse.
AIICO Insurance Plc came second, as its gross claims increased by over 25 per cent from N23.3 billion in 2017 to N29.1 billion in 2018. From this amount, about 76 per cent was for benefits and claims payment in our Life business with the remaining 24 per cent incurred in the Non-Life business.
According to the managing director/CEO, Mr. Edwin Igbiti, insurance companies are in the business of paying claims, hence, bringing relief to clients in times of losses. While expecting that, as the company continues to grow, claims expenses will grow accordingly, he, however, added that, sound reinsurance arrangements (for Non-Life) and conservative reserves (for Life benefits & claims) have been put in place to moderate impact on the company’s statement of financial position.
FBNInsurance Limited came third, promptly paid N4.8 billion claims to its policyholders who suffered insured risks in its 2018 financial year, which is a 66per cent increase from N2.9 billion in 2017.
Consolidated Hallmark Insurance(CHI) PLC, which came fourth, continued to fulfill its obligations through prompt claims settlement as gross amount paid out in its 2018 financial year was N4.7 billion, when compared with the N3.3 billion paid in 2017. The managing director/CEO of the firm, Mr. Eddie Efekoha, said, his insurer has continued to fulfill its claims payment obligations to customers promptly amidst rising claims in the industry.
He said: “The increase in the figure for 2018 is attributable largely to a few large one-offs with a single payment on a marine hull loss amounting to N2.1 billion as significant recoveries on overall claims expenses amounting to N2.9 billion were however made from its robust reinsurance arrangement.”
Sunu Assurances Nigeria Plc also kept its own side of the contract with its teeming customers by paying claims as claims expenses rose to over N1 billion in its 2018 financial year. In the same vein, African Alliance Insurance PLC paid a sum of N1.8 billion claims to policyholders who suffered insured risks in the first quarter of 2019.
This shows N300 million growth from N1.5 billion claims paid in the same quarter in 2018. Speaking on this development, the managing director/CEO, African Alliance, Mrs. Funmi Omo, said her company has always been responsive to its obligation, promising to continue to pay genuine claims.
The Nigerian Agricultural Insurance Corporation (NAIC) paid N464 million claims in the first quarter of 2019 to its insured farmers across the country, saying, prompt payment of claims has always been the cardinal principle of NAIC.
Universal Insurance Plc, on its part, paid a sum of N194.9 million as claims in its 2017 financial year, while it equally paid N340.9 million in its 2018 financial year, recording about 80 percentage increase within the period under review.
NSIA Insurance Limited settled claims amounting to N673 million in its 2018 financial year. Speaking at a media briefing in Lagos recently, the managing director/CEO, Sunu Assurances Nigeria Plc, Mr. Sam Ogbodu, said, honouring claims obligation is the reason why underwriting firms exist.