Over the past five years, the insurance policyholders in the country have recovered N540bn claims from the insurance industry after suffering insured risks. The industry has also generated a turnover of N1.5tn over the last five years.
An annual analysis of the trend of claims payments from 2013 to 2017 shows a steady increase in claims paid by the industry, even as more policyholders are now aware of how to claim when an insured risk occurs, contrary to what it was years ago. During the period under review, the results showed that non-life insurance companies paid N287bn, while life insurers paid N253bn, bringing the total to N540bn claims paid by the sector.
In 2013, the insurance industry paid N92.9bn to claimants, including N38.6bn for non-life subscribers and N34.3bn for life insurers. In 2014, policyholders received N35.9bn from life insurers and N51bn from non-life insurers, bringing the total claims paid for this year to N86.9bn. At the end of 2015, the industry paid N105.1bn in claims, of which N50.5bn for life companies, and N54.6bn for non-life policyholders.
In 2016, a cumulative sum of N119.5bn was paid as compensation to plaintiffs, with life insurance companies repaid N61.8bn and non-life insurance companies with N57.7bn claims. Although the total insurance claims profile in 2017 could not be established, as some policyholders have not yet obtained regulatory approval for their accounts, observers believe that the industry could have paid N135bn claims in the last financial year.
The benefiting claimants comprise of public and private companies, government at federal, state and local levels as well as individuals who have paid premium to ensure their respective risks before they happened, Leadership reported. Although most people have faulted the inability of some underwriting firms to pay claims as and when due, leading to low patronage of the insurance industry, things seem to have changed for better as insurers are now waking up to the reality that they will lose their customers if they refuse to promptly pay genuine claims.
With incessant increase in volume of car crash, building collapse, fire incident in factories and market places, among other risks across the country, there has been continuous upsurge in the volume of claims in the last five years. Besides, increase in replacement value of insured assets, which is making underwriting firms to pay more to replace assets when risk occurs, could be partly responsible for the increase in claims value.
Meanwhile, the insurance industry generated a whopping N1.5tn premium income in the last five years, despite the low insurance adoption and penetration in the country. In 2013, insurance companies made N267.8bn premium income, generated N293bn in 2014, made N312.4bn premium income in 2015 and in 2016, the premium income of the industry was N315.8bn, while the industry recorded N363bn premium income in its 2017 financial year end.
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