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Disgruntled customers have accused African Alliance Plc of financial shenanigans over unpaid claims as the insurer that is technically insolvent seemingly doesn’t have the financial strength to meet its obligations.
These customers who had invested their life savings in some products owned by the firm with the expectations of getting their money back as at when due have lost hope in the entire insurance industry.
“African Alliance company PLC has refused to pay me and many others their insured money, months and years after maturity. I have written several emails to them without a single response. I have been to their office at Ikoyi last…I told them to just please tell me exactly when I’ll be paid, that I don’t mind waiting till the end of the year, that I just need a specific time range and unfortunately, they can’t even tell me that,” said an embittered customer named Owon on Nairaland.
Trust and prompt payment of claims are sacrosanct words of insurers, but transparency remains a big issue in Nigeria.
“These insurance companies are dubious. Mutual benefits extended the maturity of investors’ funds twice! From 5 years to 10 years! If you want to withdraw your funds, it will come with penalties and you’ll be given like 70% of your initial deposit. It’s like they’re secretly hoping the investors die before the investment matures,” another customer complained on the Nairaland thread.
The customer Owon claimed the former chief executive officer (CEO) African Alliance made some bad investments that led to the loss of a huge amount of money which was deleterious to the entity.
“What I think is that they’re just being deliberately evil. Everyone I met there the day I went came for a similar claim, some have been waiting for the past 3 years. These guys are still collecting some people’s money actively, even though they know they won’t be able to pay them when the money matures,” said another person.
It is important to note that customers say the National Insurance Commission (NAICOM), the body that regulates the industry, needs to be scrutinised by the government for turning a blind eye to the activities of some Insurers who are swindling or dubious to their clients.
“Insurance company executives are some of the biggest frauds we have in this country and nobody is saying anything about it,” said a customer.
While customers are disappointedly complaining about a breach of trust by African Alliance and some of its peers, they are however oblivious that the insurer’s deteriorating balance sheet may be hindering it from paying claims.
Of course, African Alliance cannot meet its obligation as it has a negative net solvency ratio -613 percent as at December 2022 from the same deficit position of -302 percent as at December 2021, according to data gathered from the company’s audited financial statement.
It is worthy to note that total admissible total assets of N34.64 billion were lower than the total liabilities of N44.90 billion, leading to a negative solvency margin of –N10.26 billion.
The solvency ratio is a measure of the risk an insurer faces of claims that it cannot absorb. The solvency ratio of an organization gives an insight into the ability of an organization to meet its financial obligations.
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I know pensioners who insured their life benefits with them, they have stopped paying them abruptly without notice informing them of any challenge more worrisome is that they are not taking calls or responding to emails.