20 insurance firms pay N77bn claims to Nigerians in Q3

Nigerian listed insurers are paying more claims due to exposure to the oil and gas sector which should help bolster confidence in insurers by customers.
Of the N77.16 billion claims expenses incurred by 20 insurers in the third quarter (Q3) of 2018, life business made up N33.23 billion (42.85 percent) while non-life  segment was equivalent to N42.15 billion (61.26 percent).
The year on year percent increase in claims expenses for the firms is 18.15 percent, according to data compiled by BusinessDay.
A further break down of the figure shows combined Life business was up by 14.27 percent in September 2018 while non-life- which comprise of Marine, Motor and Accident, bond, and Oil and gas- was up 23.05 percent in the period under review.
“Claims in the market are going up while top lines have been growing by a single digit. There are exposure to the oil and gas. In the last five years, Total’s Egina FSPO has total payment with underwriters to a tune of $95 million dollars. We have to put the claims in a reserve hence bloating our claims and underwriting reserves,” said Jide Orimolade, managing director and CEO of Law Union and Rock Insurance.
Linkage Assurance Plc’s claims to the oil and gas, which is 67.69 percent of total non-life Business total obligation, surged by 460.25 percent to N1.32 billion in September 2018 from N235.64 million as at September 2017.
Consolidated Hallmark Insurance’s claims to oil and gas sector surged by 146.05 to N419.09 million in the period under review as against N170.30 million the previous year.
Aiico Insurance’s claims to Life Business, which is half of total figure for the 20 firms, increased by 16.33 percent to N15.95 billion in September 2018 from N13.15 billion the previous year.
AXA Mansard’s total claims expenses to Non-Life Business surged by 307.44 percent to N3.83 billion in September 2018 from N940.89 million the previous year.
Experts say it is difficult to further jerk up premium rates in a country where disposable income are under pressure, adding that huge claims were paid during the recessionary period as a lot of people were forced to apply for settlement.
“Insurers used to record huge investment income in past but overtime the yields have been seen falling. So, there is no cushion to reduce the high rates of claims and expenses,” said Moronfola Monsuru – Actuarial Analyst at Wapic Insurance.
With only 1 percent of a population of 180 million with any form of insurance cover, experts are of the view that opportunities abound in the market as a growing young population that crave for consumption means individuals and businesses will need insurance against unexpected losses.
“We can’t stop the claims no matter the risk management measure. Standardized rates will help insurers. If we apply standard rates it will help the industry,” said Orimolade.

BALA AUGIE