CHIEFTAINS of the insurance industry have appealed to the Federal Government to make insurance the cornerstone of the nation’s economic blueprint for the industry to significantly increase insurance contribution to the GDP.
Besides, insurance managers counseled the public to buy insurance protection to cover their lives and property in this time of economic challenges as insurance the world over is the most favoured risk transfer mechanism.
Industry managers who spoke to The Guardian at the backdrop of recent meeting between the Minister of Finance, National Insurance Commission and insurance industry operators, said in line with the change agenda of the Federal Government, the attitude to insurance has to change in favour of the industry, adding there is low patronage of insurance business by government and its agencies and the lack of effort to protect public assets. Even when it does insure, the funding is haphazard. For instance, last year, the government budgeted N2 billion to pay insurance premiums, regrettably only 10 per cent of the budgeted amount was paid, while the bulk of the fund was diverted to other areas, industry managers said.
The Commissioner for Insurance, Mohammed Kari, told the Minister that insurance sector is indeed a key component of the Nigerian financial system considering that in most developed jurisdictions, the insurance sector accounts for a significant portion of the economy. As an emerging and transitional economy and in line with the change agenda of the Federal Government, the relevance of the insurance industry becomes more critical as a provider of capital, employment and security, he said.
He said as the country’s economy continues to develop and with the attendant risks involved in economic expansion and growth, it is indeed imperative to consider the role of insurance as an important determinant to progress and development.
Kari told the Minister that governments general attitude to insurance has to improve. There is low patronage of insurance by government and its agencies and the lack of effort to protect public assets. Even when it does, the funding is haphazard. It is common knowledge that the ability of government to replace damaged or lost assets is not as sound as it used to be as such insurance is the best alternative to no protection at all.
The Nigerian Insurers Association (NIA) – the market umbrella body for the underwriting companies, amplifying the need for government support for insurance industry said, “over the years many diverse claims running into billions of naira, such as victims of severe floods, motor accident, fire accident, to claims emerging from explosions, and air clashes, have tested to the resilience of the insurance industry to meet obligations to policyholders”.
For instance, the association said, in 2011, the underwriting firms paid N70.710 billion to individuals and corporate policyholders, in 2012 the claims payment went up to N72.209 billion and in 2013, it increased to N89.945 billion.
The Director General of the association, Sunday Thomas, said from our statistics is an evidence that our members have an obligation to restore clients to good standing after a loss. Also, he said, the NIA encourages member companies to pay all genuine claims expeditiously.
He said “The association in recognition of possible disputes established a Customer Complaints Bureau headed by a retired judge of the Supreme Court. The Bureau is completely independent of the association. The principal objective of the bureau is to ensure that all parties to insurance transactions are fairly treated while their rights are preserved. The bureau is an alternative dispute resolution mechanism which is unbiased, transparent and result-oriented. The aim is to promote sound professional ethics and best practices.
According to him, for the industry to carry the enormous responsibility of risk bearer, government as the main mover of the economy, should support the industry to carry out this responsibility”.
Source: Guardian News