Insurance companies in the country may be daring the National Insurance Commission (NAICOM) on
the regulator’s resolute to ensure that underwriters meet their claims obligations as claims ratio of some insurance companies are still below 10 per cent.The claims ratios is claims payable as a percentage of premium income. This is the equivalent of gross profit margin for an insurance business. An insurer’s investment income is also part of its core business so the comparison with gross profit is not exact.
Surprisingly, some insurance companies are yet to meet their claims obligations as at when due whilst few others have in their records, insignificant percent of claims which cannot be compared to the huge premiums they generate.For instance, a five-year claims ratio of an acclaimed top player in the insurance industry which generated between N5bn to about N10bn within the five year had claims ratio dangles between 3 and 10 per cent in those five years whilst another top player in the sector whose income range between N5bn to N15bn has claims ration of between 30 to 48 per cent in five years.
Mr. Fola Daniel, Commissioner for Insurance, said that it is also evident from the number of complaints handled by the bureau that the insuring public is becoming aware of the role of NAICOM as the government agency responsible for insurance related matters to which insurance related complaints were forwarded to.He said, “The consumer protection unit of the commission has been properly positioned to handle such complaints with dispatch, any defaulting company will be required to pay such claims. Non-payment of genuine claims is enough ground to suspend or cancel the operational certificate of a registered insurance company.
“This is why NAICOM advises policy holders to ensure that they obtain their policies from NAICOM registered insurance companies only. A policy obtained from a fake insurance institution has no liability attached and no compensation can be received if such complaints are made to the commission.”He maintained that the commission considers prompt claims settlement as the best awareness campaign tool.
“For us at NAICOM, the greatest awareness campaign an insurance company can embark upon is prompt settlement of claims. When an insurance company pays claims promptly, then a lot of Nigerians would begin to have more confidence and people would buy more insurance products.