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Successful insurance companies have history of positive claims settlement – NAICOM

In this interview, Deputy Commissioner for Insurance,  Technical, at the National Insurance Commission, NAICOM, Mr. Sunday Thomas, harps on the need for prompt payment of claims and other issues. Excerpt:

By Rosemary Onuoha

HOW can the sector win back the confidence of consumers?

We can’t be talking of not doing the appropriate thing and then approach the customer with absolute confidence.

NAICOM

Insurance: Hedging the Risk of Uncertain Loss

Appropriate, prompt and adequate claims settlement remains the bedrock for success within the insurance industry. You tell me one company that is doing well, and I will tell you that their history in claims settlement is positive.

And if a company is not growing and is on a downward slope, the first point of check is how they react to claims settlement. These are facts. In 2018, there was a 30 percent growth in claims settlement, but that is not to say that all is well with us in the area of claims settlement.  We will still continue to push ourselves to the point that it becomes rare to find a situation where there is a claim that is not settled. That is where we want to reach.

What efforts are NAICOM making to enhance financial inclusion in the sector?

Financial inclusion is one of the tools we envisaged to help us improve market penetration.

The initiative is premised on the fact that getting the mass of the financially excluded to embrace insurance in one form or another will have a positive impact. Accordingly, insurance companies are being encouraged to have a buy-in into our microinsurance initiatives for the Nigerian market. The Takaful market is still grossly under accessed by the public, there is therefore the need for aggressive promotion in aid of financial inclusion.

In addition, efforts are being made to expand the distribution channels for insurance products because the traditional channels are becoming too restrictive and suboptimal. Whereas Bancassurance has received the most attention, there are other initiatives to reach out to the public.

How has the sector fared so far this year?

It has become a common saying that Insurance is underperforming in Nigeria, with dismal percentages and unflattering comparisons trotted out to reinforce this position. While one may not disagree that the industry is performing less than optimal potential, the insurance industry has not been static. All our indices have grown steadily though at a slow pace over the past few years.

The gross premium as at the third quarter was N315 billion, a 22% increase over the N258billion for 2017 in the same period. The Gross claim figure for third quarter 2018 was N143 billion, a 30% increase over the N110 billion reported for the same period in 2017. We anticipate the final figures for 2018 to be significant indeed.

The outlook may not be as rosy as we all would have liked but NAICOM sees the silver lining and is fully committed to making the most of it. We have set for ourselves a clear, unambiguous task: to improve the aggregate numbers by enabling individual operators to optimally serve a much larger customer pool with a more varied basket of products.

The end game for us is to increase the insurance uptake ratio among the Nigerian populace and we have a number of initiatives in place towards achieving this.

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