The biggest advertisement needed to promote insurance patronage is prompt claims settlement according to industry experts.

The Nigerian underwriting companies have so far paid N1.5tn claims to their customers in six years according to industry statistics.

Figures obtained from the industry regulator, the National Insurance Commission, reveal that the claims paid by the underwriters have been on the rise with increased awareness and premiums.

According to the industry bulletin report for 2022 financial period released by NAICOM, the industry paid claims totalling N318.2bn to its customers in the period under review.

Claims of N336.8bn was recorded in 2021, from N247bn in 2020 and N225bn in 2019.

The claims paid in 2018 and 2017 were N252bn and N186bn respectively.

Total claims paid in the six-year period amounted to N1.5tn.

The NAICOM bulletin reveals that premiums earned by the industry rose to N726bn in 2022 from N616.6bn in 2021, and N514bn in 2020.

Premiums of N508.23bn, N426.2bn and N372bn were earned in 2019, 2018 and 2017 respectively.

The premium in the periods under review amounted to N3.16tn.

NAICOM states in the 2022 bulleting that, “The insurance claims reported during the fourth quarter stood at N318.2bn representing 31.2 per cent QoQ growth.

“Possible attainment as a result of growing awareness and market expansion as well as consumer’s confidence.”

Insights into the non-life segment shows that motor insurance led with regards to claims settlement vis a vis gross claims reported at about 92.3 per cent, signifying a nine points improvement as against its prior position.

Fire insurance was the least at about 46.3 per cent, the only class below average proportion. All other portfolios of general accident insurance at 80.7 per cent, oil & gas at 51.6 per cent, marine & aviation at 74.4 per cent, miscellaneous insurances at 86.1 per cent recorded a proportion above the average, of paid claims against gross claims reported.

Life insurance business on the other hand reported two points less in comparison to the position held in the prior period of 94.6 per cent of net claims paid compared to total claims reported during the same period of 2021.

Claims

NAICOM, recently, said it will revisit the decision to publish the list of claims-paying underwriting firms.

The Commissioner for Insurance, Mr Sunday Thomas, while address journalists, said, “Claims payment has always been one aspect the industry is battling to balance. We all agree that we cannot claim ignorance of the fact that the industry is paying huge claims out there even though activities of few among the operators is jeopardising the efforts of the majority.

“We had before now agreed to start ranking companies on the number of claims received and settled on an annual basis and we intend to publish such ranking for the insurance consumers.

“It is always an issue that puts the entire industry on the edge. The commission is doing all it can to see that the non-settlement of claims is brought to its barest minimum in the sector.”

Thomas notes that insurance practice in Nigeria in the past has had its good, bad and ugly moments.

One of such bad and ugly moments that have had significant impact on the image and perception of the industry is the issue of claims payment, he says.

He adds that, “Indeed the records and statistics of unpaid claims associated with some of our members has not been too good and must be overturned to the benefit of all stakeholders.

“I must quickly acknowledge and salute the efforts of those companies that are alert to their responsibility of prompt claims payment and encourage them to sustain the good practice.”

According to him, insurance practitioners must be seen to be fighting this cause genuinely and collectively for the future of insurance to be as bright as we expect it.

“We must not continue to harbour elements of destruction under our roofs,” Thomas says.

The commissioner notes that the issue of non-payment of genuine claims has always put the commission and the entire industry on the defensive when it comes to discussing insurance in every stratum of the economy.