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Why insurers paid N14 billion worth of claims to fire victims, others

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Commissioner for Insurance, Alhaji Mohammed Kari

The nation’s insurance sector, through its underwriting firms, have disbursed the sum of N14 billion insurance claims to fire victims across the country.

While majority of the claimants are corporate organisations, who had insured their office premises against fire out breaks, investigation revealed that there are pockets of individuals who had insured their houses or shops against fire disaster, getting claims as well.

With incessant increase in fire incidents across the country, especially, in factories and market places, there have been continued surge in the volume of fire claims in the last five years.

Data sourced from Insurers’ Digest, a publication of the Nigerian Insurers Association (NIA), showed that insurance companies paid N5.7 billion fire claims in their 2016 financial year, while market analysts expect the figure would be higher in 2017, estimating about N8 billion.

For the 2016 financial year, 260 companies and individuals got N5.7 billion claims from 20 insurance companies across the country.

The same data sourced from NIA revealed that AXA Mansard paid the highest claims of N345 million to Mainstream Energy Solutions Limited for a fire damage, followed by Linkage Assurance Plc, which paid Grand Products Company Limited a sum of N312 million claims on a fire incident in the company, even as Ranona Limited got N300 million compensation on a fire incident from NEM Insurance Plc.

Custodian and Allied Insurance Limited paid N280.9 million fire claims to Mainstream Energy Solutions Limited and N162 million fire claims to Grand Products Company Limited.

Most of the claims, it was learnt, came from urban centres such as, Lagos, Abuja, and Port Harcourt.

With this trend, the insurance industry has improved over time in the area of paying genuine claims as more people are now aware on the need to make claims whenever an insured risk occurs.

Already, the Federal Fire Services and the National Insurance Commission (NAICOM) has signed an agreement to use Fire Brigade in each states of the federation to increase insurance subscription of buildings, which also includes fire insurance.

This is to ensure that insurance sector generates more premium from fire insurance in the current year, which would also increase the claims’ profile of underwriting firms in the country.

Currently, The Guardian learnt that NAICOM is already in discussion with four states- Lagos, Ogun, Kaduna and Gombe, to use their respective state Fire Service to drive this insurance enforcement, since Fire Service is empowered by law to enforce building insurance, as there is also a plan to meet the Governors’ Forum to get the buy-in of the 36 state governors on the initiative.

At an insurance fora held in Lagos recently, the Chairman, NIA, 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, as according to him, that is the reason why underwriting firms exist.

He said the best form of insurance advocacy that operators can do is to pay claims, saying, the beneficiaries will spread the gospel of getting claims in insurance firms, thus, persuading more people to pick up insurance policies.

Efekoha 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 item.

Besides, the Executive Director, Leadway Assurance Company Limited, Adetola Adegbayi, has urged insured Nigerians to always demand for claims from their insurers whenever an insured risk occurs.

Adegbayi, who stated this in Lagos State,  noted that some Nigerians who purchased insurance policies are ignorant on when and how to make claims, adding that, instead of going to their insurers to make claims, they decide to bear the financial burden themselves.


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