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THE Nigerian insurance industry has been under focus in the last few years, making the industry the subject of indepth analysis by economic and financial experts and those overtly critical in search of the past records of an industry in search of greater relevance in the scheme of development.
The overriding interest of the public in an industry that has suffered dented image by the unscrupulous practitioners that dominated the sector before the last government induced consolidation and recapitalisation programme, could not be far from the quest to know if anything good can come out of an industry that has only impart on less than six per cent of a nation with over 140 million people.
For a very long period, Nigeria insurance industry was tagged the poor cousin of not only the banks, but other financial service providers, identified as contributing less than one per cent of the National Gross Domestic Products (GDP). This uncomplimentary attributes was attributed to the damages that the industry had done in the society in the past, by not paying claims, even genuine ones.
Many Nigerians, hearing that insurance business is the only business that exists to keep other businesses in operation, have had causes to ask again if insurance operators are trusted partners, that insured public can rely on in times of trouble or are fraudsters that are only interested in collection of premium. It is a general believe that insurers do not have the will to pay claims even at the expense of paid premium.
A surveyed carried out among the common citizens proved that; an average Nigerian would not deliberately locate an insurer for business transaction. In fact, in some quarters, insurance underwriters, brokers and agents are potential fraudsters, out there to take advantage of unsuspecting citizens. Many Nigerians would only buy insurance products when compelled by law, contrary to what is obtainable in other developed countries.
When the widow of Mr Stephen Adejuyi Longe visited the Nigerian Tribune office to lodge complaint on how one of the insurance companies treated her regarding the entitlement of her husband who died in a multiple fatal motor accident along Ikorodu road by Palm groove in Lagos, the question all the listeners could not answer was if insurers were partners to mitigate effect of losses or to aggravate it.
It was gathered that the Ministry of Information and Strategy, Lagos State, has maintained a life policy for Mr Longe with the insurance company since he was employed on 16th October, 2002 as a motor driver till his death. Mr Longe’s next of kin, who happens to be his wife, Mrs Longe, according to the policy was entitled to a certain amount of money after his demise.
This came to the knowledge of Mrs Longe almost a month after the incident that claimed his husband’s life. Under normal circumstance, it is well known that in this part of the world, a woman would be tagged if barely after a month, she has started demanding for the entitlement of her husband. But when the bereaved wife visited the insurance company, she was shocked with what she was told.
Mrs Longe, in a heavy laden voice, explained that the need to send back her children to school warranted her visit to the company at the initial stage. But after her first encounter with the company’s claims department that refereed her to the Ministry of Information, she was forced to visit acclaimed official insurance broker in charge of the policy, with no positive result.
After almost a month of regular visit to the company, came in contact with someone who directed her to the Nigerian Tribune office. After explanation, Nigerian Tribune visited the company to ascertain Mrs Longe claims. It was gathered that the Ministry of Information truly maintained life policy with the company for a period of time, but that the record revealed that government stopped remitting Mr Longe’s premium to the coffer of the insurance company at a particular time which tallied with when Mr Longe died.
The company told the Nigerian Tribune that the claim demanded for was no more payable, claiming that Mrs Longe did not report to the company within three months after the demise of her husband which led to the closure of Late Longe’s file with the company.
Explaining further, the company further claimed that the policy that Late Longe maintained with it in his lifetime indicated that the beneficiary of the claim must notified the company within three months in case of death, added that for the fact that Mrs Longe has failed to notify the company within that stipulated period, she was no more entitled to the over N600,000 claims.
Meanwhile, Barrister Adewuyi Taofeek, a Lagos-based Lawyer, explained that the company could not be blamed for non payment of the claim, added that insurance business is a contract business where failure from one party may lead to the termination of such contract. He, however, enjoined that insured public should be wary of the policy and maintain utmost good faith.
But literally, Adewuyi noted that in this part of the world, it is unjustifiable to nullify such a contract base on such flimsy excuse that the beneficiary, who he claimed, ought to still be in mourning position at that period, did not show up.
During the official launch of Market Development and Restructuring Initiative (MDRI) in South-West zone of Nigeria, held in Ibadan , Governor Adebayo Alao-Akala, who was represented by his deputy, Mr Tahoreed Arapaja, bored his mind over the poor state of insurance in Nigeria, attributing it to fraudulent attitude of some insurance operators.
According to him, in the past, insurance companies were well known for their deliberate reluctance in paying genuine claims which has contributed immensely to the poor perception of insurance products even when the products are beneficial to the public.
He stressed that insurance largest market remains the third party car insurance product, noted that greater percentage of the carrier of the policy did so to please the law enforcement agents. In fact, many holders of genuine third party insurance policy will not bother to visit the company for claims when the need arise.
Recently, while reacting to a publication where it was reported that National Insurance Commission (NAICOM) mandated some insurance companies to pay certain claims to their clients, industry watchers have expressed worries over the need for any reasonable insurance company to wait for regulatory authority to mandate it before paying a genuine claim since the primary obligation of insurance was to reinstate the insured in times of calamity.
But it has become a source of worry that some insurance companies still persist in denying insuring public their genuine claims when the need arise, even at the expense of sanction threat by NAICOM.
According to industry watcher, it is criminality for any insurance company to deny clients of their claims, explaining that the primary function of insurance is to act as a risk transfer mechanism, to provide peace of mind and protect against losses, but becomes double tragedy when after suffering loss, claims are denied.
Meanwhile, the Commissioner for Insurance, Mr Fola Daniel, has said that NAICOM would enforce sanctions against companies that failed to promptly discharge their contractual obligations.
These, he said, would include but not limited to withdrawal from the statutory deposit with the CBN and suspension of operating license where necessary.