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Is Insurance the Silent Guardian for Nigeria?

Islamic Finance	3268 VIEWS
Islamic Finance
3268 VIEWS

Sunday, April 05, 2020 / 01:17PM / By Ekerete Ola Gam-Ikon / Header Image Credit: Ecographic

A detailed study, even by simple reflection, of the unfortunate and unwanted accidents and incidences that have occurred in Nigeria within the last four (4) Months may have affected the insurance industry more than any other sector, unknown to many Nigerians.

From the market fires, explosions that consumed lives and properties and attacks on our Armed Forces personnel to the novel Coronavirus Disease (COVID-19) and the necessary lockdown that has followed, then possibly the floods that are yet to come; the insurance industry in Nigeria and elsewhere bears the brunt, quite succinctly.

After the close of financial books for the previous years, the total amounts paid by insurance companies in settlement of claims can be compared to what other financial services sector players declare as profits, sometimes, for a quarter or half year. In Nigeria, according to the National Insurance Commission (NAICOM), the insurance industry settled claims amounting to N330b in 2019 as compared to N207b in 2018!

The figures for outstanding or unsettled claims remain progressive and indeterminable due to the nature of the business, on one hand and the insufficient attention paid to issues of claimants by all concerned.

Probably burdened and overwhelmed by this downside of the business, insurers had preferred over the years to work silently and let their results speak for them. Unfortunately, in this age where digitization is enhancing information technology to make every individual a knowledge hub, you are required to PUSH your good news amidst the bad news our world embraces more. So, only your bad results make news.

The TAKE and GIVE Syndrome

As an industry and business, the insurance sub-sector, like others, may be having challenges of low public appreciation and acknowledgement of its efforts, essentially because it does not follow the well-known universal principle of "Give and Take".

While businesses everywhere had learnt, decades ago, that giving had become the gateway to taking customers and their wallets, the insurance industry rather kept on taking from discerning customers (policyholders) without giving or giving back in insignificant ways.

As these customers were increasingly receiving freebies from other business players, especially during festive periods, the failure of the insurance industry to participate became even more obvious.

Yet, insurers held on to their verifiable position of doing their bits of meeting up with their obligations to clients' claims; and some of us have wondered if they are unaware of the notoriety of those insurers that have failed to pay claims, mostly on Life policies long months after all documentation have been completed.

The general impression remains that insurers only come to take and are hesitant to give!

Not even the introduction of Takaful which is modelled to give back something to its contributors after the end of the insurance year has helped to address this.

Interestingly, besides the enormous amounts paid out as claims to policyholders (individuals and organisations) during the year, insurers also make donations as reported in their audited financial statements approved by the regulator, National Insurance Commission (NAICOM).

Unfortunately, no one cares when you are not convincing in your core area.

The Season of GIVING is Here

After those decades of watching others GIVING and GAINING, the insurers recently shook off the lethargy and came forward to give FREE INSURANCE cover to health workers and professionals in the frontlines of the fight against the spread of COVID-19!

Under the auspices of Nigeria Insurance Association (NIA), the insurance companies in Nigeria have offered N1m in the event of death of health workers and N1m in terms of permanent disability to health professionals involved in this fight across Nigeria. Additionally, N100m worth of medical materials shall be donated to the National Centre for Disease Control (NCDC)!

Interestingly, a few insurers are going beyond the collective action to offer insurance packages at State levels.

It is the hope of industry analysts that this ends well for the insurance industry in Nigeria, which is fighting its own battle to see more compliance with insurance laws by individuals, businesses and governments at all levels.

While this would seem such a massive step forward from an industry perspective, the insuring public is expecting much more palliative that could come from the creative and innovative sides of the COVID-19 pandemic. Policyholders are asking if the premiums on their Comprehensive Motor Insurance could be sliced off considering that risk exposures are minimized during this period of lockdown?

Besides, businesses that are facing apparent drops in revenue are looking to receive waivers on premiums for the period that their factories and offices were shut as a show of empathy by their insurers in the spirit of the season.

Is Claims Part of the Gift?

As the NIA and her members embark on this new frontier that has brought the insurance industry in Nigeria into focus at this perilous times, a key element that needs clarification even before the health workers and professionals receive their policies is payment of claims when due.

As we have seen elsewhere, this pandemic has taken the lives of doctors, nurses and others in the frontlines just like ordinary citizens. So, are the insurers READY to honour claims promptly under this current arrangement?

It is most important that the information regarding the process of claims settlement is similarly shared along with the media blitz on the FREE INSURANCE coverage as this will be of most interest to an already disbelieving public.

Many members of this same NIA have been struggling with unsettled claims, some for over 10 months, and it will be inconceivable to even think that they are part of this novel arrangement.

Any insurance contract today that does not expressly convey the guarantee of claims payment should not earn the signature of the insured or the party making the premium payment!

Especially under this FREE INSURANCE coverage by members of NIA, where they will be paying the premium, there must be a clear and transparent process for claims settlement that the accredited beneficiaries of the health workers and health professionals will understand. It should not wait for when the claims have happened.

Out of the Silence Mode?

If the insurance industry in Nigeria has by this announcement of the NIA to support the fight against the spread of COVID-19 decided to come out of her silence mode, it is highly commendable, in my opinion.

I can immediately see the determination of the good insurers to separate themselves from the bad eggs in the industry.

I encourage Nigerians including those with deep concerns to come out and engage leaders of the insurance industry in Nigeria through available media, so they can reveal the strengths that have made insurance the silent guardian of our national economy.

Let us make insurance work for us all even as we continue to pursue the unsettled claims to closure.

Stay safe. Do not spread the virus!

About The Author

Ekerete Olawoye Gam-Ikon, MNIM, CPP, is a management consultant with a specialization in Strategy and Insurance. He is available through e-mail olagamola@gmail.com

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