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Experts charge insurers on prompt claims payment, economic growth

By Bankole Orimisan
25 August 2022   |   2:36 am
The need for insurance operators to make prompt payment of claims to retain public trust has been a major concern in some of the paper presentations of stakeholders at major industry events held between January and now.

Insurance

The need for insurance operators to make prompt payment of claims to retain public trust has been a major concern in some of the paper presentations of stakeholders at major industry events held between January and now.

The stakeholders believe that claim payment is the basis for every insurance contract that could help to enhance confidence among insurance buyers so that the sector will be able to contribute optimally to economic growth.

They argued that insurance penetration in the country still stood at 0.7 per cent of Gross Domestic Product, GDP, below the global and sub-Saharan African average of 7.20 per cent and two per cent respectively.

However, they agreed that a major factor liable for low penetration of the sector is the culture of non-settlement of claims by insurance operators.

At this year’s conference of the African Insurance Organisation (AIO) in Nairobi, Kenya, Chairman/Chief Executive Officer, Boff & Company Insurance Brokers Limited, Babajide Olatunde-Agbeja, advised underwriters to do more beyond the settlement of claims in order to deepen penetration in the country.

He noted that changing the mindset of the people has been extremely difficult; adding that the insurance industry must go all out to convince them that insurance administration, especially claims payment, has improved tremendously.

Olatunde-Agbeja said although few companies still mount many stumbling blocks to avoid paying claims, others are paying promptly.

He stressed that only prompt and adequate payment of claims can convince the public that insurance works in the country.

“Simply put, settling a claim instantly is the greatest advert any insurance company can have. A few have however failed in this area in the past. For example, we had a claim over two weeks ago where one of our clients was coming from the airport driving in his car and another car hit him from the rear. Our client had comprehensive insurance on his car and so it was supposed to be a straightforward claim”, he added.

Speaking at the 50th anniversary of the Nigeria Insurers Association (NIA), the Lagos State Governor, Babajide Sanwo-Olu, advised underwriters in the country to pay claims promptly in order to retain public confidence. This, he said, would help to sustain the industry’s drive to emerge as a major driver of economic growth.

The NIA Chairman, Ganiyu Musa, urged the federal and state governments to continue to support the industry through the enactment of policies that would ensure a level-playing field for all players.

The industry analyst, who is also one of the practitioners spoke to The Guardian at the weekend, where he underlined some of the industry’s challenges, saying, “The way the practitioners package their policy statements and the products they offer to Nigerians also played a role in building a negative image for the industry.

“But in all, people felt more offended with the practitioners’ negative attitude towards claims settlement as they often use an interpretation of the insurance policy wordings when a claim occurs to shirk even genuine claims.

“What this means is that since the essence of buying insurance is for the policyholder to be paid claims when there is a risk but the insurers who are in the business to pay the claims are no longer paying, the insuring public decided to hold their money and carry their risks by themselves when they come.”

He said this was the genesis of the industry’s poor image and patronage problems until in recent years when modern managers started feeling the negative impact as while they were earnestly searching for patronage, some sector operators were busy taking their juicy accounts to foreign insurers whom they have more confidence in.

This cuts across all sectors including government business just because the public has no confidence in the ability and willingness of indigenous insurance firms to pay claims.

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