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The most liquid and well capitalized insurers who are beset by rising inflation, volatility in the currency, and spiraling overhead costs have been meeting their claims obligations to policyholders.
For instance, they collectively paid N105.67 billion in claims in the third quarter of the year, which is 14.45 percent higher than 2021’s N92.32 billion the previous year, according to data gathered by MoneyCentral.
It appears revenues are growing faster than increases in claims, which pave the way for them to remain profitable amid an unfavorable underwriting environment.
The average industry claims ratio reduced to 39.25 percent in September 2022 from 45.56 percent the previous year, according to MoneyCentral calculations.
Prompt settlement of claims gives policyholders confidence in the insurance industry as customers expect their obligations honored as at when due.
However, companies are conscious not to payout all of premiums as claims, which means there must be an appropriate mix between the two.
Commissioner for Insurance, Sunday Thomas, said insurance companies with outstanding claims would henceforth publish the names of claimants in two national newspapers.
“I must quickly acknowledge and salute the efforts of those companies that are alert to their responsibility of prompt claims payment and encourage them to sustain the good practice,’’ said Thomas.
“Insurance practitioners must be seen to be fighting this cause genuinely and collectively for the future of insurance to be as bright as we expect it,” adds Thomas.
“We must not continue to harbor elements of destruction under our roofs,” he said.
Analysts say such honoring of obligations reflect the professional underwriting capacity of the industry as driven by the intensified regulatory activities of the regulator.
But there are concerns that the currency price instability as evidenced by rising inflation could force insurers to raise price during the January renewals as replacement cost of assets are going up.
Nigeria’s inflation rate surged to 20.77% in September 2022, up from 20.52% recorded in the previous month, according to a latest report by the National Bureau of Statistics (NBS).
Custodian Insurance Plc claims expenses were up 33.62 percent to N16.81 billion in September 2022 from N12.58 billion the previous year. Claims ratio 45.41 percent in the period under review from 39 percent the previous year.
AIICO Insurance Plc claims expenses were up 9.24 percent to N32.95 billion in September 2022 from N30.16 billion the previous year. Claims ratio fell to 62.88 percent in the period under review from 70.22 percent the previous year.
AXA Mansard Plc’s claims expenses rose by 37.36 percent to N24.23 billion in September 2022 from N17.64 billion the previous year. Claims ratio increased to 69.91 percent in the period under review from 65.04 percent the previous year.
Coronation Insurance Plc claims expenses fell by 48.32 percent to N2.19 billion in September 2o22 from N4.24 billion as at September 2021. Claims expenses reduced to 25.96 percent in September 2022 from 64.01 percent the previous year.
Mutual Benefit Assurance Plc claims expenses rose by 28.78 percent to N9.20 billion in September 2022 from N7.15 billion at September 2021.Claims ratio increased to 42.25 percent in September 2022 from 41.18 percent as at September 2021.
NEM Insurance Plc claims expenses were 22.51 percent to N4.84 billion in September 2022 from N6.25 billion as at September 2021. Claims ratio dipped to 29.03 percent in the period under review from 40.84 percent the previous year.
Cornerstone Insurance Plc claims ratio reduced by 0.53 percent to N2.36 billion in September 2022 from N2.37 billion. Claims ratio fell to 16.15 percent to 38.12 the previous year.
Consolidated Hallmark Insurance Plc claims expenses were up 28.45 percent to N2.13 billion in September 2022 from N1.66 billion the previous year. Claims ratio moved to 40.32 percent in the period under review from 36.18 percent the previous year.