Expert Blame Slow Growth of Insurance Sector on Low Premium Charges,Others

Expert Blame Slow Growth of Insurance Sector on Low Premium Charges,Others

Ebere Nwoji

Former Secretary General Africa Insurance Organisation (AIO), Ms Prisca Soares and other stakeholders in the industry, have blamed slow growth and development of Nigerian insurance sector on low premium rate and lack of collaboration among the operators.

Soares, who spoke as Chairperson at this year’s edition of the  Claim Advocacy Conference organised by Carefirst Consult,  said premium charged in Nigeria was too meager compared to what was applicable in other parts of the world and insisted that something needed to be done about it.

This year’s edition of the conference which has the theme ‘Understanding Insurance Beyond Claims Payment,’ emphasised the need for collaboration among insurance  industry operators.

Soares observed that a situation where some company gave so much as discounts to their clients was one thing that was not allowing the industry to grow the way it should.

“This is a suicidal tendency which we have to do something about. We really need to cooperate in this market so that there would be sustainability because if insurance goes down, everything else does,” she appealed.

Other speakers at the conference include Managing Director, Grand Metropolitan Associates; Mr. Reginald Egbuniwe,

Chief Client Officer, AXA Mansard Mrs Rashidat  Adebisi, and, Financial/Fintech Expert and insurance consumer  Mr. Richard Ogunmodede.

In his presentation titled ‘What Insurers do When Claims are Reported,’ Egbuniwe listed the complexities of handling some claims which he said was  very important for consumers to understand.

Highlighting the differences between simple and complex claims, Egbuniwe said “If you have a simple claim, the insurance company has to be notified. Once a claim is reported, the insurance company has to receive it, and make sure that whoever is reporting the claim has a policy with them. The claim has to be authenticated and when that is ascertained, a number will be allocated and a claim form is sent. This doesn’t take long.  Depending on what is in the policy, it is expected that a claim should be reported in seven days, 14 days, or whatever.

He advocated for the employment of Loss Adjusters into the insurance system so that they would  monitor the process of  work in real-time.

Speaking on ‘Why documentation is critical for claims payments,’ Rashidat Adebisi highlighted the importance of accuracy and timelines as critical to claim administration, which she said assists the insurers in taking decision on claims.

She educated the public on how to go about their claims filing process saying: “Insurance needs to have documentation, it is actually required by law. As a policyholder when an incident occurs and you are making claims, it is expected that you provide concrete evidence before you can be paid”.

“There is a need for documentation because sometimes insurance companies may want to pay but if you don’t have the necessary document required by law, it becomes a problem.

”Customers should always ensure that forms sent to them are properly filled and returned to their insurance companies ahead and not necessary when there are claims to make.

“Some people even tender fake receipts and you have to validate it.  There is a need to investigate because, in this part of the world, people can be funny,” she added.

In his presentation on ‘Claim is the Best Teacher in Insurance/Life After Claims’ Ogunmodede, highlighted the industry’s problems and the negative effect on its growth.

He said  the problem was the leading indicator and that the  impact was  a liking indication. “If you want to manage something it is better to focus on the leading indicator because you cannot control or influence the liking indicator.

“Insurance has been mispriced in Nigeria.  There is a mismatch in the system. In the industry, you have bad insurers and bad consumers and so you have big systemic problems.

“Insurers talk all the talk but they never do the work. They just compete based on agreed premium and at a zero rate and the consumer assumes there are implicit guarantee that even when the insurer goes down, they will still get their indemnity so they don’t care about the rate too.

He said the growth rate of the Nigerian insurance industry and its contribution to the nation’s GDP was very small and called on the operators to do something, especially on the issue of rate.

While narrating his experience with the Nigerian insurance industry, he said the process of getting claims paid was  too cumbersome and called for a better way of doing it.

Earlier in his welcome address, the Founder/Principal Consultant, Carefirst Consult Limited, Mr. Gus Wiggle, highlighted the objective of the conference which he said was to ease discussions about claims amongst insurance stakeholders thereby filling the void in the insurance ecosystem and adding to the value chain of insurance.  We are purposed to be the bridge between the consumers and the insurance providers.

“Claim will remain the anchor of insurance business and will remain on the front burner while communication will become the point of impact of expressing consumers’ impressions…”

He said paying claims was part of the insurance proposition, adding that a lot needed  to be done to boost communication with customers on claims issues.

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