By Patience Saghana
Seven insurance companies have agreed to pay N6.9 billion to Nigerian Bottling Company for material damage to its Benin Factory occasioned by a fire incident which occurred twelve months ago.
The seven companies are:Â Royal Exchange Assurance of Nigeria, Leadway Assurance Company, Cornerstone Insurance Plc, Law Union and Rock Insurance Plc, Custodian and Allied Insurance,
The agreement was reached on November 17, 2009 by all the parties involved and the underwriters and reinsurers are making frantic effort to pay the claims before the end of this month.
An analysis of the N6.9billion showed N6.82billion as material damage; N64.19 as loss adjustersâ€™ fees; N36.35million as Estate Valuersâ€™ fee; Quantity surveyors and mechanical Engineers are to get N15.81million.
Again, of the N6.9billion, Royal Exchange Assurance is apportioned N3.290billion while its reinsurers is to settle huge part sum of N3.165billion;Â Leadway Assurance N1.388billion and its reinsurer to pay N1.201billion; Cornerstone Insurance , N520.58million its reinsurer takes N498.56million; Law Union & Rock Insurance, N520. 58million, reinsurer, N405.16million;Â Custodian & Allied Insurance, N520.58million, reinsurer, N496.47million; Staco Insurance, N347.05million, reinsurer, N34.71million; Zenith General insurance to pay N347.05, reinsurer to settle N312.34million.
And of the total sum, Financial Vanguard investigations revealed that reinsurers of the seven companies are to pay N6.1billion of the N6.9billion claims whilst the underwriters are paying the balance of N800million.
It would be recalled that loss adjusters had reduced the NBC claims through and through from an initial N15 billion claims to N11 billion and finally to N6.9billion since the fire incident that occurred on December 18, 2008.
Meanwhile the N6.9billion does not include consequential loss which may likely up for claims settlement.
In basic terms, consequential loss is the basic value of loss, specifically when it relates to the loss of a property’s use. A good example of this loss is when a fire damages a building’s structure and causes the businesses to lose income until it is finally able to reopen after renovations and repairs. This is because the seven insurance companies put in place adequate treaty for the account.
The delay in the settlement of claims was as a result of a protracted negotiation among loss adjusters, seven insurers and the insured. NBC which was estimated at a total value of N210billion paid a premium income of N58billion. A breakdown of the N58 billion premium according to Financial Vanguard investigations showed that the lead insurer, Royal Exchange led with 45.5 per cent with N27.7 billion premium of the N58 billion whilst it was apportioned N99 billion of the total value; Leadway Assurance has 20 per cent with a premium of N11.6 billion and N42 billion of the value; Cornerstone Insurance, Law Union and Rock Insurance and Custodian and Allied Insurance had a share of 7.5 percent each, with a premium of N4.3 billion apiece and N15 billion allotted to each of them whilst Staco Insurance and Zenith Insurance had five percent share with N2.9 billion premium each and N10 billion of the entire value.