Couple of weeks back, National Insurance Commission expressed reservations on the volume of outstanding claims at insurance companies pay point; the Regulator reminded CEOs at that Insurance Committee Meeting that the high volume of outstanding claims in the books of insurance companies especially general business is a clot that should be removed, but the Commission was also quick to add that the records up and until Q3 2023 is encouraging. However, NAICOM said it does not serve as a platform to accept outstanding claim data as the sustained normal.
Seventeen days separate the release of this data and the Insurance Committee Meeting, where the Commission in clear terms reminded insurers that the obligation to claims paid is an integral part of the insurance transaction and having a high level of outstanding claims stand to deflate the gains of companies that keep handing out claims cheque at the pay point. The Commission in series of public engagements steadily says claims pay despatch to policyholders needed to be more fluid and, the diameter of the claims pump large enough to dislodge the outstanding claims.
NAICOM current Nigeria Insurance Market at a Glance clearly underlined the claims kudos from the Commission with a striking net claims pay of N259bn and the gloss claims of N365.5bn. This leaves over N100bn claims still not at the place of pay point a figure that propels the Commission to rally insurers to up their game of paid claims.
As it stands at the Q3 market performance the ratio of total claims to total premium was 50.1%, in developed markets the ratio of total claims to total premium is higher with a figure rising to over 70%. This means that for every N100.00 premium collected customers get 50 kobo.
The industry stats for ratio of claims paid to reported, stood at 70.9%. However, this is the combination of flying high life stats on claims paid to reported which secured 94.9% and the comparative down the ladder ratio of claims paid to reported for non-life.
National Insurance Commission has been acting as an accelerant on the issue of unpaid and outstanding claims and its combined approach sometimes with a measure of sanctions, has aided the the creation of a new approach to address the stack stats on claims yet paid. The number of companies creating platforms to accelerate quick claims pay is inching up and this is beginning to resonate with the perception of insurance today with consumers and bystanders who constitute a bulk that penetration should focus on.
Steadily and eventually, its creating a win-win for the operators, customers, stakeholders and the regulator and creating a rainbow coalition that will push insurance penetration. The recently adopted approach to scale down the Commission’ directive to publish outstanding claims in national newspapers to the industry preference for same at first instance in the NAICOM portal instead of newspapers as NAICOM had earlier asked, is not a throw way or a drain of the Commission move to reduce heap of outstanding claims but one of the movers that quickens the process and stamp the insurance necessity in the purse of potential buyers and present buyers to consider additional policies.
