Fire Outbreak: Insurance Firms Pay N27bn Claims To Victims

As fire outbreak continues to wreak havoc in houses, shops and market places, insurance companies have paid about N27 billion insurance claims to fire victims across the country in the last three years.

Findings by LEADERSHIP showed that within the period, there have been more than 20 major cases of fire outbreak in major cities of the federation, with over N200 billion worth of properties destroyed in the process.

Although, the investigation revealed that most of these incidences were not insured, those who insured their properties against fire were adequately compensated by their respective insurers.

While majority of the claimants were  corporate organisations who had insured their office premises against fire out breaks, investigation revealed that few individuals who had insured their houses, offices or shops against fire disasters, got their claims as well.

With incessant increase in fire incidents, especially, in factories and market places, there has been continuous surge in the volume of fire claims in the last five years.

Data sourced from Insurers’ Digest, a publication of the Nigerian Insurers Association (NIA), shows that insurance companies paid N5.7 billion fire claims in their 2016 financial year, while they paid about N9.8 billion in 2017 financial year.

While data of how much was paid to fire victims in the last financial year (2018) were still sketchy with few underwriters yet to get regulatory approval on their accounts, market observers put the fire claims paid at about N11.5 billion.

For the 2016 financial year, 260 companies and individuals got N5.7 billion claims from 20 insurance companies across the country. Most of the claims, it was learnt, came from urban centres such as, Lagos, Abuja, and Port Harcourt. 

For the 2016 financial year, 260 companies and individuals got N5.7 billion claims from 20 insurance companies across the country. In 2017 financial year, 480 companies were paid N9.8 million fire claims, while about 600 claimants may have received N11.5 billion claims on their respective fire and special peril insurance policies.

The data sourced from NIA reveals that AXA Mansard paid the highest claims of N345 million to Mainstream Energy Solutions Limited for a fire damage, followed by Linkage Assurance Plc who paid Grand Products Company Limited a sum of N312 million claims on a fire incident in the company.

Also, Ranona Limited got N300 million compensation on a fire incident from NEM Insurance Plc while Custodian and Allied Insurance Limited paid N280.9 million fire claims to Mainstream Energy Solutions Limited and N162 million fire claims to Grand Products Company Limited.

With this trend, the insurance industry seems to have improved over time in the area of paying genuine claims as more people are now aware on the need to make claims whenever an insured risk occurs.

This, according to experts, is a signal to traders, who are skeptical about whether their claims would be paid or not, that underwriting firms will always honour their claims obligation.

Chairman, Nigerian Insurers Association (NIA), Mr. Tope Smart, advising traders and others to insure their properties said, claims would be paid when an insured risk occurs.

He said, though, there has been series of complaints of claims default against some insurance firms, NIA, as an association, is addressing this issue by advising operators on the need to promptly pay genuine claims. He stressed that claims settlement instill trust in the mind of the people, increases insurance patronage, thereby, deepening penetration.

The president, Chartered Insurance Institute of Nigeria (CIIN), Mr. Eddie Efekoha, on his part, said insurance operators have improved in the area of prompt payment of genuine claims, noting that honouring claims obligations is the reason why underwriting firms exist.

He said the best form of insurance advocacy that operators can do is to pay claims, saying, the beneficiaries will spread the gospel of getting claims in insurance firms, thus, persuading more people to pick up insurance policies.

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