BY SYLVESTER OKOH
FRI, 12 AUGUST 2016-Most Insurance companies in Nigeria are routinely failing to pay claims and maturity to clients, diverting monies instead to getting new contracts and paying some percentage of premiums to retain their licences.
“The pressure on the economy is compounding the pressure on their finances making them delay or deny payment outright,” according to one client who says he has not been paid any claims since the current financial year.
He said that at this point most are still struggling with renewing and retaining their licences because of their performance which one insurance insider says is very disheartening.
The insurers committee recently reduced the time frame required for the payment of claims from 90 to 30 days after a recent meeting chaired by the Insurance Commissioner, Mohammed Kari. The decision reached at the meeting include penalising any insurer who failed to pay at the expiration of the 30-days period and forcing them to pay an interest equivalent to that of the Central Bank of Nigeria, CBN, to the insured on his claim.
The decision was part of a N1 billion plan to re-brand the sector which contributes about 10 percent of gross domestic product, GDP, to the economy but has been reeling from a string of bad financial results in recent times.
G&BJournal was told the committee action was also in response to numerous reports by clients who complained to the National Insurance Commission, NAICOM, about outright denial or delay in payment by the insurers, generally referred to as bad faith insurers.
