Non-Settlement Of Claims Damaging Reputation Of Insurance Industry—NAICOM
The National Insurance Commission on Wednesday warned the management of insurance companies in Nigeria against refusal to pay claims.
The Commissioner for Insurance and Chief Executive Officer of NAICOM, Mr. Olorundare Thomas, said this at the 2021 insurance directors’ conference with the theme, “Insurance Industry in a Changing World”
He said while the commission has implemented various measures to reposition the insurance industry and make it contribute significantly to the country’s Gross Domestic Product, the issue of claims settlement is threatening such efforts.
The NAICOM Boss said that insurance business is about payment of genuine claims and anything short of that will continue to hurt insurance business in the country thereby giving the industry poor reputation.
He urged the Directors to work closely with their management as a lot is expected from them to take the industry to the next level.
Thomas said the Commission is working assiduously to open up the market particularly the retail end, as well as conducting engagements with various agencies and state governments on the need to boost insurance culture across the country.
He said, “If the industry is desirous of having significant impact on the nation’s GDP, it therefore must take retail business seriously. This has to start from the policy level and the directions clearly spelt out.
“This also must be supported with massive awareness campaign about insurance products across the geo-political zones taking into consideration peculiarity of each of the regions.
“One issue that has been setting the industry on a reverse gear in its developmental efforts is the issue of claims settlement. A few amongst us have been making this work a tedious one by not paying claims promptly.
“We should know as a fact that insurance business is about payment of genuine claims and anything short of that will continue to hurt insurance business in the country thereby giving the industry poor reputation, perception and image. I urge you to look at this issue at your level and deal with it decisively as it has continued to give the industry a bad name.”
Speaking on some of the measures so far taken by the Commission to improve the performance of the insurance industry, the NAICOM Boss said it launched a portal in September to ensure effective and efficient interface between the Commission and stakeholders.
He said, “The Commission had since directed all operators to integrate their operations with the portal. It is imperative to inform you here that any company that is lagging behind in this regard is inadvertedly phasing itself out of business.
“Your respective attitude towards information technology funding in your various companies will go a long way in determining the longevity and existence of not only the companies, but the retention of the brand names or corporate identities. This is food for thoughts.”
He also said the volatility, dynamism and complexities in the operations of today’s businesses has necessitated the need for a risk-based approach to the way and manner the Regulator conducts its supervision and inspection of insurance entities.
He said it is on this premise that the Commission commenced the implementation of Risk Based Supervision (RBS) of the sector.
“We incepted the conduct of a pilot inspection of some select companies in September this year preparatory to full implementation and the reports are now being reviewed. Going forward, inspection of insurance entities will be on the RBS approach, he added.