Insecurity, Other Challenges Push Five Insurance Firms Claims Payment To N114.73bn

… Rising Claims Payment Weighing Heavily On Profitability

Leading insurance companies in Nigeria, including AIICO Insurance Plc, AXA-Mansard Plc, NEM Insurance Plc, Prestige Assurance Plc and Consolidated Hallmark Insurance Plc, paid a combined N114.73bn in claims during the first half of 2025, up 27.39 per cent from N90.06bn in the same period last year.

The surge in claims underscores both the growing reliance on insurance by policyholders and the economic headwinds straining the sector.

According to financial reports analysed by THE WHISTLER, the five companies generated N250.18bn in revenue within the period under review, compared to N177.50bn in the first half of 2024, representing a 40.94 per cent increase.

However, 45.86 per cent of their earnings was expended on claims settlement, only a slight improvement from the 50.74 per cent recorded last year.

Industry stakeholders say the jump in claims is linked to inflationary pressure, worsening security challenges, fraudulent claims, and weak maintenance culture among Nigerians.

They also argue that while the rising numbers reflect improved awareness and trust in insurance, the trend is weighing heavily on premium growth rates and profitability.

Managing Director of Tangerine General Insurance Plc, Mr. Mayowa Adeduro, attributed the rising claims to the economic downturn, which has encouraged more policyholders to pursue claims for even minor incidents.

He explained that the erosion of disposable income has worsened maintenance culture, while inflation, naira devaluation, and high energy costs have pushed up the value of claims.

“Disposable income has gone down, and people are struggling to maintain what they have. Vehicles are poorly maintained, yet insurers must pay when accidents happen. Social vices such as armed robbery, kidnapping, and even fraudulent incidents like setting houses ablaze for claims are also on the rise,” Adeduro said.

Director General of the Nigerian Insurers Association (NIA), Mrs. Bola Odukale, stressed that despite lingering public scepticism about the sector, insurers have consistently demonstrated commitment to claims payment.

She argued that the increased claims reflect growing awareness and a stronger image for the industry.

“Despite the negative perception that some members of the public have about insurance, the fact remains that companies are paying huge claims. Claims payment is part of image making, and continuous engagement with the public is vital if the industry is to bridge its knowledge gap,” she said.

Immediate past President of the Chartered Insurance Institute of Nigeria (CIIN), Mr. Edwin Igbiti, added that the rise in claims is evidence of improved insurance consciousness among Nigerians.

According to him, “A sense of awareness has started coming in and people are beginning to take insurance more seriously. Although penetration remains low, this growth in awareness shows that there is room for improvement.”

The National Insurance Commission (NAICOM) corroborated these views in its first quarter 2025 report, noting that targeted regulatory measures have boosted public confidence, encouraged policyholder rights, and expanded claims reporting. The regulator maintained that increased business activity and stronger consumer confidence have also contributed to the higher claims payout.