Insurers pay out nearly N175b claims, up 7.7% YoY
By Jeph Ajobaju, Chief Copy Editor
Gross claims paid by insurance firms to policyholders increased to N174.8 billion in the first half of the year to June (H1 2022), a rise of 7.7 per cent versus N162.3 billion in H1 2021.
The sector rebounded from a 6.9 percent decline in H1 2021 which itself lagged behind the figure for 2020.
Insurance analysts believe the uptick in H1 2022 claims payment is linked to growing awareness, increased regulatory demand, and customer-focused competition in the insurance industry.
Gross claims grew 9.8 per cent year-on-year (YoY) from N225.2 billion in 2019 to N247.2 billion in 2020, and from there grew further by 36.2 per cent to N336.8 billion in 2021.
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Impact of greater enlightenment
The National Insurance Commission (NAICOM) said rising claims by policyholders reflects increasing enlightenment, market confidence from both demand and supply sides, and the effects of regulatory measures to ensure claims settlement.
Anchor Insurance Executive Director (Technical) Adebisi Ikuomola explained the growth in claims is connected to improved market discipline and customer-focused regulation, according to reporting by Vanguard.
“Claim remains one of the most essential components of the insurance business model, without which there would have been no reason to insure.
“Due to the continued and deliberate regulatory measures with regards to public awareness and enforcement of timely claims settlement, claims continue to grow in reportage and timely settlement,” he said.
More insurance firms in for NAICOM liquidation
More insurance companies are in for the hammer besides Niger Insurance and Standard Alliance Insurance whose licences were revoked in June by NAICOM.
NAICOM Deputy Commissioner (Technical) Sabiu Abubakar ecplained closing down more insurance firms will both sanitise and strengthen the industry, which has a reputation for failing to pay claims after collecting premiums.
“Recently two insurance companies’ licences have been withdrawn and these are: Niger Insurance and Standard Alliance Insurance,” he said in July.
“Though managing the death or failure of financial institutions is very demanding, nevertheless more may still be liquidated in order to sanitise the insurance sector,” Abubakar warned at the Chartered Insurance Institute of Nigeria (CIIN) Second Edition of 2022 Business Outlook Seminar in Lagos.
Regulatory oversight
NAICOM has strengthened its regulatory oversight to ensure operators discharge their obligation by settling genuine claims timely, Abubakar added, saying insurance regulation and supervision are the bedrock of national economic development.
“NAICOM’s reforms and regulatory initiatives would positively impact the insurance industry and the industry would witness tremendous development and growth,” he enthused.
He urged insurance practitioners to comply with regulations and support the efforts of NAICOM at improving the industry.
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