Experts, at the recent Coronation Insurance webinar, examined the critical role of insurance in navigating and thriving amidst economic uncertainties.
On his part, assistant director, Underwriting & Marketing, Africa Re, Yinka Dawodu, emphasised the multifaceted benefits of insurance, highlighting its role in mitigating risk, protecting assets, and fostering peace of mind, hence, ,underscoring the critical role insurance plays in ensuring financial stability, especially during challenging economic times.
Discussing the specific challenges currently being faced by Nigerian businesses, he said, a robust insurance strategy can be instrumental in navigating issues like inflation, foreign exchange constraints, and talent flight.
Similarly, the MD/CEO, Sam-Vic Insurance Brokers Limited, Oluwarotimi Adewole, said, as insurance is a liability driven business, the duration of the commitments and the guarantees/coverage offered shape the asset allocation of insurers and their sensitivity to changes in inflation and interest rates.
Claims and expense inflation, he said, is correlated with the general inflation, but tends to exceed the consumer price inflation, particularly for certain key lines of non-life business, adding that, this has been confirmed by several studies showing that, claims and expense inflation has significantly exceeded the general inflation for several years with a sharp increase observed in recent times.
Meanwhile,, the head of Corporate Underwriting at Coronation Insurance, Augustine Aniekwe revealed that Coronation Insurance provides an exceptional advisory service to ensure clients maintain adequate coverage for their property values, saying, this proactive approach helps clients avoid underinsurance and ensures they receive the full value of their claims.
“While the claims and expense inflation are correlated with the general inflation, there are also certain differences, noting that, it is important to consider the insurance specific characteristics of the inflation to get to the claims and expense inflation.
Claims and expense inflation, according to him, are mainly driven by the services in connection with the settlement of potential insured claims, noting that, specifically, claims inflation can be defined as a change in claims incurred due to inflation for a particular insurance portfolio over a specified period, usually one year.
“Claims inflation is significantly affected by increases in, for example, the prices of materials or repair work, but also by wage increases the costs of medical care due to medical advancements, which are particularly relevant for personal injuries, and changes in judicial decisions.
“Depending on the definition of claims and expense inflation, it either includes or excludes social inflation. Social inflation relates to an increased propensity to court action and a resulting higher compensation for non-life claims,” he pointed out.
Coronation Insurance, he said, remains committed to providing comprehensive insurance solutions and strategic guidance to its clients, enabling them to navigate challenges and build financial stability.
Aside the earlier speakers mentioned, MD/CEO, Orient International Loss Adjusters Limited, Christopher Owuamanam, also deliberated on the theme even as the webinar was hosted by CNBC Africa Anchor, Wole Famurewa, with concluding remarks from the head of Corporate Sales at Coronation Insurance, Oluwabunmi Adetiloye.
The core focus of the webinar was to equip participants with practical knowledge and a deeper understanding of how insurance can be a cornerstone of sound financial planning.
The event engaged discussions with seasoned professionals emphasising the fundamental role of insurance in safeguarding financial stability, to enable customers secure financial stability during inflationary challenges.
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