Insurance industry statistics has revealed that Nigerian underwriting companies have paid N1.5tn claims to their customers over a six-year period.
The National Insurance Commission reports that claims paid by underwriters have increased with intensified awareness and premiums.
Industry experts say prompt claims settlement is the most significant promotion needed to encourage insurance patronage.
According to NAICOM’s 2022 financial period industry bulletin report, claims worth N318.2bn were paid to customers in the period under review.
This figure marks a rise from N247bn in 2020 and N225bn in 2019. Claims paid in 2018 and 2017 were N252bn and N186bn, respectively. The total claims paid in the six-year period amounted to N1.5tn.
The report shows that premiums earned by the industry increased to N726bn in 2022 from N616.6bn in 2021, and N514bn in 2020. In 2019, 2018 and 2017, premiums of N508.23bn, N426.2bn and N372bn were earned, respectively. The premium earned in the periods under review totaled N3.16tn.
In the 2022 bulletin, NAICOM notes that “The insurance claims reported during the fourth quarter stood at N318.2bn, representing 31.2% 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 show that motor insurance led in claims settlement vis-a-vis gross claims reported, at about 92.3%, signifying a nine-point improvement from its previous position.
Fire insurance was the least, with only 46.3%, the only class below the average proportion. All other portfolios of general accident insurance at 80.7%, oil & gas at 51.6%, marine & aviation at 74.4%, miscellaneous insurances at 86.1%, recorded a proportion above the average of paid claims against gross claims reported.
In comparison to the prior period, the life insurance business reported two points less, with 94.6% of net claims paid compared to total claims reported during the same period of 2021.
The National Insurance Commission announced that it will reconsider publishing the list of claims-paying underwriting firms.
Speaking to journalists, the Commissioner for Insurance, Mr. Sunday Thomas, acknowledged that claims payment has always been an issue in the insurance industry.
He stated, “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.”
Thomas emphasized that the commission is making efforts to minimize non-settlement of claims in the sector. He added, “It is always an issue that puts the entire industry on the edge.”
He recognized that the insurance industry in Nigeria has had its good, bad, and ugly moments, and the issue of claims payment has significantly affected the industry’s image and perception.
He further stated, “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.”
Thomas commended the efforts of companies that prioritize prompt claims payment and encouraged them to continue the good practice. He also urged insurance practitioners to collectively fight the issue of non-payment of genuine claims for the future of the industry.
