When people come to insurance companies to insure their risks, they do so with the mindset that when risks crystalise, their insurer is their to pay them claims.
That mindset is not only restricted to individuals, companies or government too have similar mindset towards insurance subscription.
And with the age-long belief that insurers don’t pay claims, what a better time to correct this misconception if not at the point risk crystalises.
Although, insurance industry, over the years, has improved in the area of genuine claims payment, there are still pockets of unsettled claims battering the image of the sector.
This remains a demon that must be fought and defeated in unison by insurance stakeholders to refurbish the image of the sector.
So, when the federal government, last week announced it is having issues getting its N1.8 billion outstanding group life claims from insurance industry, it raises questions than answers.
FG’s N1.8bn Outstanding Group Life Claims
The Key Performance Indexes (KPIs) on settlement of claims on group life policy of the federal government as at September, 2022 indicates that the total number of claims reported was 776; number of claims paid was 357; total sum on claims reported was N4.2 billion; number of awaiting EDVs from HoS/MDAs is 101; total amount of N1.5 billion has been paid; number of awaiting DVs from Lead Underwriter is 150, translating to N2.6 billion, with N785.1 million expected from EDVs while the number of incomplete documentations is168 and total outstanding claims is N1.8 billion.
The breakdown of the report revealed there is a clear indication of a huge gap between the number of claims reported and those paid, hence, the need for improvement from the insurance service providers, as there is always room for other alternatives.
To this end, the federal government has tasked insurance practitioners to be alive to their responsibilities in settling outstanding group life claims amounting to N1,841,558,893.42.
It was earlier reported that the head of Civil Service of the Federation, Dr. Folasade Yemi-Esan, decried the lackadaisical attitude of insurance companies over non-payment of civil servants’ death benefits.
She expressed displeasure with the continuous poor performance of insurance companies, during a meeting with underwriters of the ‘Group Life Insurance Policy for Federal Civil Servants’, in Abuja, noting that ‘the dead cannot fight for themselves.’
She lamented that, despite the federal government’s effort to improve the welfare of families of deceased workers through the prompt release of funds for the payment of death benefits, the underwriters and brokers are frustrating the efforts by their unserious attitudes.
The HOS stated that their non-performance was unacceptable and must be remedied.
According to her, the meeting was necessary to bridge the gap that exists between the underwriters and brokers as it was unreasonable to continue doing the same thing repeatedly without achieving meaningful result.
If the brokers are no longer relevant, then they should be blacklisted, she added.
She informed them that payment of insurance claim is not rocket science, stressing that, the Office of the Head of Service performs similar function by settling backlog of claims not covered by the present arrangement, seamlessly.
The lead underwriter of this policy and CEO of Old Mutual (Nig.) Limited, Mr. Segun Omosehin, expressed his gratitude to the Head of Service for her concerns and show of outright displeasure with their low performance.
Omosehin, who is the newly-elected chairman of Nigerian Insurers Association (NIA) made a firm commitment to support the Head of Service by doing the needful to bridge the gap existing between the underwriters and the brokers, which he identified as the major issue responsible for the late payment of claims to families of departed civil servants.
Blame Game Between Insurers and Brokers
Insurance brokers have expressed misgivings over a statement credited to the newly elected chairman of NIA and CEO, Old Mutual (Nigeria) Limited, Segun Omosehin, that gap existing between the underwriters and brokers, is the major issue responsible for the late payment of claims to families of departed civil servants.
It was gathered from brokers that such a statement shouldn’t have come from the chairman of NIA, adding that, he is portraying that there is a gap between insurers and brokers, which is inimical to the peace and collaboration already formed over the years.
It was learnt that the allegation has also led to a campaign by some brokers to boycott the forthcoming professional forum to be organised by the Chartered Insurance Institute of Nigeria (CIIN), which is expected to bring all insurance practitioners together.
Some of the brokers craved for unity amongst operators from the various arms of the industry, so as to solve the apathy on insurance business.
Addressing the Issue
The industry experts said insurers should not be blinded to the fact that, not until recently, federal and state governments have never taken insurance seriously. But now that the sector has succeeded in planting insurance subscription to the consciousness of government, they said, backsliding to old days of not paying claims, will not be good for insurance sector that is trying to remedy its battered image.
The blame game between the insurers and brokers, they said, is uncalled for, calling on relevant stakeholders to do their part at ensuring that these outstanding claims is settled as a matter of urgency.
This, they said, should not be treated with kid’s glove as doing so could affect renewal of this policy and invariably taking away the business from the insurance industry and the consequence will damn on the sector’s bottom line. A stitch in time, they said, saves nine.