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Insurance companies earned N630.36bn, paid N238.05bn claims in 2021 – NAICOM
By Matthew Eloyi
In the fiscal year 2021, the insurance industry paid a total of N238.05 billion in insurance claims.
Rasaaq Salami, NAICOM’s Head of Corporate Communications and Market Development, revealed the figure on Monday.
The value of the Nigerian insurance business increased from N2.02 trillion in 2020 to N2.13 trillion in 2021.
Nigerian insurance companies received a total gross premium income of N630.36 billion during the year, compared to N520 billion in 2020.
Mr. Olorundare Thomas, the Commissioner for Insurance and Chief Executive Officer of NAICOM, had earlier urged the management of insurance companies in Nigeria against refusing to pay claims, during a conference for insurance directors with the theme “Insurance sector in a changing world.”
While the commission has taken steps to reposition the insurance business and make it a substantial contributor to the country’s Gross Domestic Product, he said the issue of claims settlement was jeopardizing those efforts.
The Commissioner stated that the insurance sector is all about paying genuine claims, and anything less will continue to undermine the industry’s reputation in the country.
He urged the Directors to work closely with their management, saying that a lot is required of them in order to move the industry forward.
According to Thomas, the Commission is working hard to open up the market, particularly at the retail level, as well as engaging in discussions with other organizations and state governments about the need to improve insurance culture across the country.
In his words, “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.”
He also stated that the volatility, dynamism, and complexities in today’s business operations have prompted the need for a risk-based approach to the Regulator’s supervision and inspection of insurance organizations.
According to Thomas, the Commission began implementing Risk Based Supervision in the industry on this assumption.
He further stated that as part of its fundamental duty, the commission is dedicated to guaranteeing proper policyholder protection.