Chiamaka Ajeamo, [email protected]
Rising cases of fire outbreaks in major markets across the country has left the country with huge human and material casualties running into several billions in the last three months of 2019, with experts stressing it could further balloon the Nigerian insurers claims payment by the end of the year.
Insurance and loss adjusting experts have however estimated that over N120 billion worth of goods and properties may have been lost to these recent fire incidences in the country with traders and business owners bearing the brunt of such circumstances groaning under the heavy weight of loss and unpaid debts.
In the light of the above, they argued that such occurrences would have been alleviated if there were insurance covers on ground to cater for such tragedies.
For instance, on Wednesday, October 16, 2019, the popular Ochanja Market along Upper Iweka road in Onitsha, Anambra state, was engulfed by a fire, leaving several people including traders and property owners in sorrow and agony. Reports have it that the fire was caused by a petrol tanker explosion around the area.
This was followed by another incident on October 21, 2019 at the Santana Market, Sapele Road in Benin, Edo state that was razed by fire with goods worth millions of naira consumed in the blaze.
The recent Balogun market fire in Lagos also left disaster almost paralysed commercial activities in the Lagos business when twin buildings housing goods worth several hundreds of million of were burnt down on November 5, 2019.
Regrettably, most of those affected by the fire had no fire insurance or special perils policy to indemnify them.
Without doubt, many Nigerians shun the uptake of insurance policies due to several factors such as; religious biasness, low awareness and low knowledge of how insurance works especially, lack of integrity on the part of insurers to pay claims when risks crystallises.
But reports have shown that insurance firms have been settling claims as fire incidences continue to be rampant, causing mass destruction of goods and properties.
Data obtained from Insurers’ Digest, a publication of the Nigerian Insurers Association (NIA), showed that insurance companies have paid about N27 billion insurance claims to fire victims across the country in the last three years over more than 20 major cases of fire outbreak in major cities of the federation, with over N200 billion worth of properties ruined in the disaster.
According to the data from NIA, in 2016, insurance firms rolled out N5.7 billion as claims settlement for fire incidence while it paid about N9.8 billion in 2017.
While data of how much was paid to fire victims in 2018 were still sketchy with few underwriters yet to get regulatory approval on their accounts, market observers put the fire claims paid at about N11.5 billion.
A breakdown of the 2016 financial year, showed that 260 companies and individuals got N5.7 billion claims from 20 insurance companies across the country and majority of the claims settled it was revealed, came from urban centres such as, Lagos, Abuja, and Port Harcourt.
Further analysis of the data on fire claims in 2017, revealed 480 companies were paid N9.8 million fire claims, while about 600 claimants may have received N11.5 billion claims on their respective fire and special peril insurance policies in 2018.
The NIA report disclosed that AXA Mansard paid the highest claims of N345 million to Mainstream Energy Solutions Limited, this was followed by Linkage Assurance Plc who settled Grand Products Company Limited a sum of N312 million claims on fire incidence.
In addition, Ranona Limited got N300 million compensation from NEM Insurance Plc while Custodian and Allied Insurance Limited paid N280.9 million fire claims to Mainstream Energy Solutions Limited and N162 million fire claims to Grand Products Company Limited.
Though, the data revealed that a large number of those settled were corporate entities who purchased fire insurance policies for their office environment, findings discovered that individual policyholders who took fire covers for their offices, businesses, homes and other properties and buildings were also paid the claims accrued to them.
This data reveals that with the frequent fire outbreaks in the country in the last years, the insurance industry appears to have upgraded in the area of paying genuine claims as more people are presently knowledgeable on the need to make claims when an insured risk crystalises .
Industry sources have affirmed at several occasions that genuine claims are attended to because the insurance companies are in the business of paying claims. Hence, this is a clarification for traders who doubt that insurance firms would pay claims when risks occur.
Speaking on this development, the Chairman, Nigerian Insurers Association (NIA), Mr. Tope Smart, urging traders and other Nigerians to insure their properties said, claims would be paid when an insured risk occurs.
“Though, there has been series of complaints of claims default against some insurance firms, NIA, as an association, is addressing this issue by advising operators on the need to promptly pay genuine claims. Claims settlement instill trust in the mind of the people, increases insurance patronage, thereby, deepening penetration,” he said.
According to the President, Chartered Insurance Institute of Nigeria (CIIN), Mr. Eddie Efekoha, Nigerian insurance operators are now better prepared for prompt payment of genuine claims, as honouring claims obligations is the principal reason for the existence of underwriting firms.
He said, “the best form of insurance advocacy that operators can do is to pay claims, because the beneficiaries will spread the gospel of getting claims in insurance firms, thus, persuading more people to pick up insurance policies.”