Insurance industry experienced higher claims payment in 2016 – Eddie Efekoha speaks

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Chairman of the Nigerian Insurers Affiliation, NIA, who can be the Managing Director of Consolidated Hallmark Insurance coverage Plc, Mr. Eddie Efekoha on this interview stated that the financial recession compelled the insurance coverage sector to half with extra claims in 2016 than the prior 12 months. Excerpts:

WHAT is the claims expertise of the trade like in 2016?

On the general, I believe the trade skilled greater claims fee in 2016 than 2015. I don’t have the numbers to help it. However I’ve my very own firm inner numbers. I’ve additionally seen some publications within the press and I wish to take it that the trade skilled increased claims payout in 2016 than prior 12 months.

The explanations should not farfetched. As at December 2015, change charge was N199.7 to the greenback, however by the shut of 2016, everyone knows the end result. While premium, for example, was paid on the outdated sums insured, many of the sums insured on property particularly weren’t reviewed in 2016. As regards life insurance coverage which pertains to medical bills, while premium was paid primarily based on the previous absolute naira, while you go to the hospital what occurs? You’re charged on 2016 price. To deal with the identical minor harm which might have taken possibly N5000 in 2015, in 2016 that might have price N7000 to N10000.

Insurance industry experienced higher claims payment in 2016 – Eddie Efekoha speaks
Eddie Efekoha
The identical factor pertains to motor insurance coverage. If in case you have a door out of 4 doorways broken in 2015, how a lot would it not have price you to exchange and the way a lot did it value in 2016. Meantime, a few of the insurance policies that had been taken in November or December 2015, have been nonetheless operating by November 2016 as a result of it’s a one yr contract. So the claims have been processed on the change price of 1 greenback to over N400. So expectedly, the claims quantity will enhance. With out pointing to any specific sector, we had some bit of fireplace claims in 2016 within the trade. So claims have been on the rise.

What options are you able to proffer?

That could be a query we have to ask ourselves. The place we have to proffer a bunch resolution, we’ll proffer a gaggle resolution. The place individually we now have to proffer an answer on firm foundation we’ll achieve this. Thankfully, we have now a motor technical committee, now we have the hearth places of work committee, we’ve got numerous technical committees within the NIA and they’re all working, they’re all evaluating notes. That’s the great thing about the Affiliation. However statistics continues to be missing.

The problem about statistics is that many firms haven’t had their accounts concluded. The accounts must be accredited initially and the businesses have their AGMs earlier than the authorized account may be launched to the general public. Till that AGM takes place, you can’t launch any information to the general public and the NIA can’t get such information due to this fact we can’t course of them.

We are able to solely work with what now we have. The quarterly publication are skeletal in info as a result of there are not any backups however while you have a look at an annual account even from what’s printed you’ll be able to extract some information for comparability.

What to do going ahead

Insurance coverage strikes in circles as properly. The smooth market and the arduous market aren’t peculiar to Nigeria. If we had very excessive declare season what which means is that we’ve got to up our charges. When issues are good once more, we have now to go gentle and decrease the charges. So we’ll respect this cyclical nature of our enterprise.

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