As the Boko Haram terrorist sect continues to unleash mayhem in the northern part of the country, there could be a rise in insurance claims as a result of the constant loss of life and property.

Managing Director of FBN Life Assurance, Mr. Val Ojumah who made the prediction said that the Boko Haram crisis will definitely lead to increase in claims due to the increase in number of deaths being recoded from the crisis.

He said “On the crisis in the North, you know that it is a political situation. What I do know is that definitely it will lead to increase in claims because many people have been killed in those circumstances. What I cannot say for sure is whether or not those people have life insurance policies.”

He however said that since political risk is actually an exclusion from life policies, insurance companies will have to make a judgment whether or not they can accommodate such claims.

According to Ojumah, FBN Life is looking at ways to accommodate such claims. “We have not received any claim in that regard but we are looking at accommodating political risks in our policies. The real challenge is buying reinsurance for it. Political risks are a major challenge for insurance companies. Most international investors coming into this economy, they do require political risk insurance but it is not available locally but we have had circumstances where we have to buy that risk from international insurance market.”

Asked if the Boko Haram threat could lead to increase in premium rates Ojumah said that his company didn’t design policies just for a select group of people, adding “ So I don’t think that it will increase rate or reduce rate because of that experience alone. You have to look at your whole portfolio at the end of the period and then determine whether a particular product requires any change in its structure which will include the rating. You can even decide to withdraw a particular product entirely from the market.”

On the challenges which his company is undergoing being a new company, Ojumah said “All the large insurance brokers out there insist on your being in business for at least three years before they can do business with you.