Improved claims payment, profitability key to insurance’s growth
Experts in the nation’s insurance industry have charged underwriters across the country to make prompt claims settlement a priority if they indeed want to increase insurance penetration in the Nigerian market.Of all the sectors in the financial service system of the economy, insurance industry seems to be the one enjoying the least patronage as its penetration and acceptance in Nigeria is still below one per cent.
The low penetration in the country is a serious cause for concern to experts, investors and market observers, as Nigerians continue to nurse negative perception about claims settlements by underwriting companies.Insurance consumers, however, charged underwriting outfits to honour their claims obligation as inability to do so has made insurance penetration below one per cent, despite the country’s huge population.
To them, the best form of publicity lies in paying claims as and when due, a development that will trigger more policy adoption, thereby, increasing penetration cheery news to the industry players.There are also complaints about the terms and conditions that are not adequately spelt out at the point of buying a policy, which only become issues at the point of claims.
These bad experiences, they said, have made them and their colleagues have reservations for insurance as a product.Meanwhile, Saham Unitrust Insurance Nigeria Limited posted a 27 per cent rise in gross written premium, a development that would boost confidence of Nigerians in the nation’s insurance industry- its stability, liquidity and ability to pay claims.
The company’s gross written premium rose to N3.168 billion at the end of December 2018, from N2.486 billion at the end of December 2017, to add to insurance industry’s revenue profile.The increase in the group’s level of activity was mainly attributable to strategic partnership and increase in market drive.
The Managing Director of the company, John Ijerheime, who spoke to The Guardian in an interview, said that despite the challenges in the economy, the company emerged with improved results compared to last year’s figures.It’s profit before tax stood at N806.18 million at the end of 2018 from N818.04 million at the end of 2017, while its profit after tax rose to N759.96 million from N427.68 million respectively.
Saham Unitrust stated that it will continue to intensify its efforts to ensure that investment income remains a key revenue source. The group’s stated that its investment is in accordance with its investments policy, which is compliant with regulatory requirements.
A market observer, who also spoke to The Guardian, urged insurance companies to consistently pay claims if they want people to buy policies, adding that it is the best form of advert they can do, as anybody who gets claims will persuade friends to join.
Insurance market operators, the expert said, must take their time to explain the terms and conditions of each policy to policyholders at the point of buying the cover to avoid conflicts at the point claims.
The Executive Secretary, Nigerian Council of Registered Insurance Brokers (NCRIB), Fatai Adegbenro, charged the citizenry to embrace insurance, as it is key to survival. “When there is a disaster, government can only pay you token but with insurance, you will get near or exactly what you have lost. Everybody needs it because of the daily risk we are exposed to.
“One of the cheapest things you can buy is insurance. For instance, you can insure a N10 million house with N25,000 premium. Most policyholders do not know that the Fire Insurance policy they have covers flood, or when wind blows off the rooftop. All these need to be explained to policyholders by marketers to ensure that customers maximize their cover,” he said.To settle a claim, he said, it should not take more than five days, but that when a claimant failed to submit the required documents on time, it will prolong the claims payment period.
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