Protest: It Will Be Difficult For Insurance Firms To Cope With Huge Claims— Brokerage Firm

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The damage caused by the hijack of the #EndSARS protest by hoodlums after Tuesday’s shooting at Lekki in Lagos will be overwhelming on Nigeria’s insurance industry, CSL Stockbrokers Ltd, has said.

The Abuja based stockbroking firm said the massive destruction of both public and private property has sparked worries on the ability of the insurance sector to cope with the expected number of claims.

The sector is projected to face insurance claims amounting to billions of naira, owing to the destruction of both public and private properties.

The sector is yet to recover from insurance claims arising from the Cobid-19 induced business disruptions.

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This is coupled with efforts to meet the new capital requirement by the National Insurance Commission.

The companies are expected to meet at least 50 per cent of the capitalisation by December 31.

The second phase which will end on the final deadline of 30 September 2021 would require 100 per cent.

The performance of the insurance sector closed lower by 0.59 per cent during the week ending October 23 this year, sparked by weak sectoral sentiment.

Among the top clients whose properties were badly damaged are banks. In Lagos handful of banks saw their properties damaged.

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In Aba, Akwa-Ibom and Cross River, so many bank properties where badly damaged, while other properties belonging to private and public individuals where torched.

In Lagos alone, the Governor, Babajide Sanwo-Olu estimate that N1trn will be needed to reconstruct the damaged properties in the state.

“Nigerian Insurance sector remains largely underdeveloped with Insurance penetration still at two per cent,” CSL said.

The sector contributes less than 0.5 per cent of Africa’s largest economy’s Gross Domestic Product.

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