After the #EndSARS protests where properties were looted, destroyed and vandalised, insurance companies are already witnessing huge claims request, running into several billions of Naira. ZAKA KHALIQ writes on this development that will change the landscape of insurance industry in the outgoing year.
During the recent #EndSARS Protests in the country, most government offices, banks, shopping malls, media houses, toll plazas, and private offices were set on fire by suspected hoodlums after soldiers reportedly shot in the air to disperse protesters on the night of 30 October.
Estimated cost of destruction have been put above N1 trillion.
While most insurance contracts excluded damage to property from war, riots, or other forms of force majeure, insider sources confirmed that underwriters may pay for the some of these risks, depending on discretion.
The head, bancassurance and distribution, Old Mutual Nigeria, Dumebi Okonkwo, said, it was pathetic that during the last protest, many SMEs suffered heavy losses arising from vandalism and destruction of their business assets but that only few of them have these assets and properties insured.
She added that most SMEs would struggle to come out of this quagmire as they may have to start from the scratch again, saying, those who were fortunate to insure, will have no challenge, as their insurers will take up this financial responsibility and return them back to the financial position they were before the incident occurred.
“Since SMEs are the drivers of the economy, they should benefit from insurance claims, but unfortunately, many of them did not insure, believing that disaster such as this will not happen. But the wise ones who insured will automatically get their claims,” she said.
For SMEs, she said, risk assessment is very critical to mitigate financial loss such as this, saying, insurance companies, such as Old Mutual have different insurance products to insure SMEs in the country.
During the time of writing this report, some insurance companies contacted confirmed they have commenced the process of paying insurance claims to some victims of the #EndSARS protest who had previously insured their shops, offices and properties against strike, riot and civil commotion, among others,
To this end, findings show that some policyholders have already approached their insurers for claims that are expected to run into several billions of Naira.
Already, Consolidated Hallmark Insurance (CHI) Plc, Coronation Insurance Plc, AIICO Insurance Plc, Leadway Assurance Company Limited, African Alliance, among others, are persuading the victims that are yet to process their claims to do so, expressing their readiness to settle the claims with immediacy.
The chairperson, Organised Private Sector of Nigeria (OPSN), Hajia Saratu Iya Aliyu, incurred humongous losses following the mayhem unleashed by hoodlums who cashed in on the protest to loot and burn properties and destruction of infrastructure..
OPSN comprises of; the Manufacturers Association of Nigeria (MAN); Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Nigerian Association of Small and Medium Enterprises (NASME); Nigeria Employers’ Consultative Association (NECA); and Nigerian Association of Small Scale Industrialists (NASSI).
The chairman, Lagos chapter of Nigerian Association of Micro, Small and Medium Enterprises (NASME), Dr. Adams Olu Adebayo, stressed that, goods and properties worth over N2billion have been destroyed and stolen by the hoodlums coupled with the loss of lives.
Adebayo said: “It is disheartening and saddens with various complaints received from our numerous members on how the hoodlums hijacked the protests by destroying factories, warehouses, shops, stores, malls etc. in the name of expressing their frustration and anger while some are searching for Covid-19 palliatives.”
But unfortunately, most of those businesses were not insured, hence, will have to source funding elsewhere to restart their businesses.
In total, goods and properties destroyed and looted were estimated to be above N1trillion.
CLAIMS REQUEST MOUNTS
Coronation Insurance Plc, formerly known as Wapic Insurance Plc, while sympathising with victims of the recent #EndSARS protest, reaffirmed the commitment of the insurance firm to pay claims as and when due.
The insurer, in a statement, however, reassured its clients and the general public that, following the recent monumental loss of human life and damage to property and assets across the nation, Coronation Insurance ‘has shifted to our highest gear to get our customers the most appropriate help as quickly as possible at this time of need.’
Similarly, Consolidated Hallmark Insurance(CHI) Plc said, it is set to settle insurance claims for policyholders whose policies cover Strike, Riot and Civil Commotion(SRCC) extension.
The company, who stated this in a mail sent to all its policyholders and stakeholders across the country, noted that, such claims, like all others, would be expeditiously handled to ensure that customers are back in business as quickly as possible. While calling on the victims of the #EndSARS protests to file their claims through the company’s website and customer care centre, it assured the aggrieved policyholders that they would be attended to passionately.
In the same vein, AIICO Insurance Plc has stated its readiness to meets its obligations to customers who have policy covers for incidents that occurred during the recent riots.
The managing director/CEO, Mr. Babatunde Fajemirokun, stated that the riots have had tremendous effect on individuals and businesses, both small and large. “The losses incurred in terms of human lives and assets are enormous. Our thoughts and prayers are with those who have been affected in one way or another. I assure you that as a Company, we are doing all that is necessary to see our customers through this phase. We are asking our customers with covered cases to contact us for immediate assistance with claims,” he pointed out.
Leadway Assurance, Cornerstone Insurance, NEM Insurance, among others, had earlier sent a mail to their respective clients and stakeholders, expressing their readiness to settle genuine claims arising from the protests.
OPERATORS SET TO PAY EndSARS PROTEST CLAIMS
Reacting on this development, the chairman of Nigeria insurers Association (NIA), Ganiyu Musa has said, all valid claims arising from the EndSARS vandalism and looting from policyholders will be duly settled according to the terms of the policies obtained.
Musa, who is also the group managing director of Cornerstone Insurance Plc, added that, assessment of claims from the crisis is currently ongoing across insurance companies as some of them have started getting notification of claims from policyholders.
He stated that, presently, loss adjusters are already touring the sites of the affected companies and businesses evaluating the extent of damages done.
Musa noted that claims from these damages will have a negative impact on companies’ liquidity, balance sheet and cash flow but essentially, insurance was built for times as these and this is why people take up policies.
He assured that all policyholders both individuals and businesses with valid insurance policies that have been paid for, will be duly compensated as all members of the NIA will indemnify and provide them the necessary pay out in line with the terms of their policies.
“Policyholders with valid claims have nothing to fear. This is why you took insurance, for times as these. If you are in doubt of how to start processing your claims, you can get in touch with your insurance company or brokers. They will put you through the claims process,” he stressed.
The managing director/CEO, Universal Insurance Plc, Ben Ujoatuonu, said insurance companies will pay for every cover that extends to riot and commotion, but will not pay for covers that excludes riots and commotion.
He said: “it depends on the cover the company or individual has bought. If the policy excludes riot and civil commotion, then the insured will not receive any indemnity from his insurance company.”
He however said, some policies may have been extended to cover riot and civil commotion, in such situation liability will attach.
He further said most of the companies that arranged their insurance through brokers, would possibly, have bought such extension.
The Universal boss, who also frowned at the situation in the country, acknowledged that, this is not the best of time for the insurance industry in Nigeria especially after the Covid -19 pandemic which affected global businesses.
When asked if covers not extended to riot and commotion can get any form of compensation from insurers, the managing director/ CEO of Sovereign Trust Insurance Plc, Olaotan Soyinka, noted that, in the commercial aspect of the trade, each company is at liberty to act according to her policy on ex-gratia payment.
This, according to him, is paying a claim not on the merit of the circumstances because there has been no claim according to the terms of the policy but for some extraneous reasons the company decided to pay some token.
The STI boss was of the opinion that governments can also come to the aid of those who suffered losses either directly or through the insurance industry,
He however reaffirmed that claims will surely be paid if extension on the policy covers riot, strike and civil commotion, otherwise, such losses are not covered.
The Royal Exchange General Insurance Managing Director, Benjamin Agili, said with the latest development, most underwriters will begin to exclude riot & strike and writing it back into the policy will now be very expensive.
On compensation, he said, covers with extension of riot & strike would be paid their claims.
The MD/CEO, Law Union And Rock Plc, Ademayowa Adeduro, said that based on the low level of insurance density in Nigeria most of the those that lost their lives and properties may not have cover for life or property insurance.
He explained that some of the shops looted and public and private buildings set on fire if they do have insurance, compensation will depend on investigation to be conducted by loss adjusters in line with terms and conditions of the polices.
He further said, with the massive nature of destruction which may likely run into hundreds of billion of naira, the Insurance Industry most likely going to demand for government bailout or incentive to be able to cope with the envisaged claims.
According to him, the bailout may come inform of cash bailout, tax incentive or medium to long term low interest loan.
NEED TO INSURE
The head, bancassurance and distribution, Old Mutual Nigeria, Dumebi Okonkwo, said, for SMEs, risk assessment is very critical to mitigate financial loss such as this, saying, insurance companies, such as Old Mutual have different insurance products to insure SMEs in the country.
To sustain and securitise one’s business, she said, the owner must insure his equipment, motor vehicles, stock and human capital, saying, Fire insurance, burglary insurance, motor insurance, group life insurance, among other products, are insurance solutions to protect entrepreneurs and their businesses.
Speaking on liabilities that business owners are exposed to, the head, corporate sales, Old Mutual Nigeria, Makanjuola Tubi, said, there are policies that cover liabilities that are likely to occur in the course of business, noting that, liabilities can arise from product sold, use of public space or even advice given by the virtue of one’s profession. He listed some of the products to include; product liability, public liability, professional indemnity, Employee accident benefit insurance, among others.
Stating the benefits of these insurance coverage, he stated that, the capital is untouched, working capital is unmarred while business continuity is guaranteed.