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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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