It will soon become claims payment made easy across the insurance industry. The move in this direction was disclosed today by the Chairman, Nigerian Insurers Association NIA, Mr. Kunle Ahmed at a Quarterly Media Chart with insurance media at NIA House, Victoria Island, Lagos. The technical committee of both the insurers body and the Nigerian Council of Registered Insurance Brokers NCRIB, are currently in the works to set the minimum documents to be requested for different classes of business for quick claims processing and payment.
Mr. Ahmed who presents the insurers body as a plug in to ease of claims payment said, “We are trying to harmonise that process, as an industry limit the number of documents required.” He cleared that the industry has come to the acceptable clarity that it was time to have an industry restriction on the minimum documents required for claims to be paid as an industry standard.
He said this point was reached not because the industry was looking for a vent to push claims settlement to policyholders but to reach the point where valid claims are logged with ease and paid in the shortest possible time. Noting that the history of claims payment has been registered as an industry obligation, he cited the claims payment record of 2023, when the industry recorded a premium income of N1.1tr and paid N536.5 bn as claims translating to 53% of premium received.
“Despite the quantum of claims paid we still believe we have a lot more to do especially around the ease of making claims and the timely payment of those claims,” he maintained. He adds that “The hallmark of any insurance company worth its licence is the timely payment of claims” and should be the delight of both the insurers and policyholders. Moreso, he said the policy is a promissory note that the insurer has the obligation to the the claim when the risk crystalises.
The enforcement of the third party motor insurance he squared has created increase in motor underwriting and the would no worries about claims arising. He said companies are providing reserves to meet claims that would happen. Ahmed submits assurance, “I can assure you that insurance companies are ready and willing to pay valid claims. We expect to see a situation whereby you exchange policy documents and each person will refer back to his insurance companies to pay claims. Overall the enforcement of the third party motor insurance is a welcome development for the economy, the insurance companies, and the policyholders.”
The internal combustion of the industry and piercing eagle eye of the Commission are not driving the coming transformation in claims payment across different classes of risks without other stakeholders, the services of a fintech has been engaged to get it right now and in the years coming after. Ahmed infers that is the reflection of high score the industry attached to fixing the claim challenge as it relates to making the claims processes a delight for all.
“NIA will soon be inviting Fintechs to make a pitch on different innovations that will ensure that the claim process is shortened leading to improvement in the timely payment of claims.” he declared.
On the recent publication of pending claims in the books of insurance companies by the National Insurance Commission in their website, he said the action has given comfort to policyholders. All companies in the market he noted, have been put on notice that the Commission is watching and there is a zero tolerance for not paying claims already admitted.
“By publishing the names of insurance companies with outstanding claims and the details of these complaints, NAICOM is promoting transparency and demonstrating commitment to protecting the interests of policyholders. It sends a strong message to insurers that the regulator is taking the issue of unpaid claims seriously and is willing to take concrete action to ensure that policyholders receive their due compensation as at when due.
“Whilst most companies will meet their claims obligations, it is believed that the threat of being publicly named and shamed, coupled with potential sanctions for non-compliance, is a strong incentive for insurance companies to prioritise the settlement of outstanding claims and improve their claims-handling processes. NAICOM has explicitly stated its zero tolerance for delays in settling genuine claims and has warned that non-payment could even lead to the cancellation of licences,” he stated
However, he said several companies have reacted to the publication with concern, citing inaccuracies in the lists and a lack of active engagements prior to the publication. They argue that some listed claims have already been paid or are subject to ongoing disputes or are even fraudulent. He said the Association had reached out to members requesting them to provide updates on each complaint listed against them, this would enable NAICOM update the list accordingly.
