By ZAKA KHALIQ Lagos
Insurance companies in the country are currently facing low travel insurance policy sales and high claims demand as the multiplier effect of coronavirus pandemic continues to bite harder, LEADERSHIP learnt.
Although, federal government has since 5th of September, 2020, opened up the nation’s airspace for international travels, following five months of earlier closure in a bid to contain the pandemic, this development has not reflect in the sale of travel insurance policy, as most underwriters were still complaining of low patronage.
Travel insurance policy is an insurance coverage for risks associated with traveling,such as, loss of luggage, delays, and death or injury while in a foreign country.
Most international trips require a traveler to purchase travel insurance coverage with most embassies making it one of the requirements to grant visa to intending traveler.
Market observers attributed the low or non-patronage of travel insurance, to the apathy of Nigerians to travel abroad, especially, as the Covid-19 protocols to observe before entry into most European countries were considered too stringent. Most of the international trips in recent days, it was learnt, were movement from abroad into Nigeria, even as as most of these travelers had their travel insurance domicile in their respective countries.
Market analysts expect things to subside in the coming weeks as countries across the world continue to relax their international travel protocol, which could give rise to travel insurance subscription.
In a proactive move, some local insurers are already re-tweaking their respective travel insurance packages to cover some aspect of Covdi-19 pandemic.
While Unitrust Insurance Company Limited has announced it is now offering cover for certain events relating to COVID-19 across a wide range of its underwritten travel insurance policy., some insurers, it was learnt, are putting finishing touches to their travel policies, which are expected to be unveiled in the coming weeks.
The managing director/CEO, Unitrust Insurance, Mr John Ijerheime, stated that, “Unitrust Insurance travel insurance covers has: 24/7 Medical assistance in the event insured falls ill with COVID-19 while on holiday; Emergency medical expenses due to covid-19; Emergency medical evacuation and repatriation due to covid-19; Leisure sport activities; Loss of Passport or Baggage; Repatriation of Mortal remains and Emergency Dental Coverage.”
Similarly, investigation revealed that there were increased claims demand, which peaked during the total lockdown, although, it is gradually easing down. Most of the claims, according to findings, arose from those who insured their businesses through Business Interruption insurance policies even as Loss Of Job insurance policy offered by some insurance companies, equally, witnessed increased claims,as companies were sacking their workers.
Market observers expect all these to affect negatively the balance sheets of insurance firms in their 2020 financial year end.
Confirming the development, executive director, technical, Anchor Insurance Company Limited, Mr. Adebisi Ikuomola, who highlighted the various challenges posed by the pandemic, stated that, the impact of the pandemic on the insurance services could be felt in areas like; high claims demand, credit risk exposures from businesses facing possible default, lack of sales from travel insurance, less use of face to face marketing channel, surge in demand for health and business interruption insurances.
Speaking in an exclusive interview with LEADERSHIP, the president, Nigerian Council of Registered Insurance Brokers(NCRIB), Mrs Bola Onigbogi, said, following the pandemic that is changing business dynamics, some insurance policies may have to be tweaked a little bit by brokers and underwriters to cover the emerging realities of the Covid-19..
According to her, “most importantly, brokers, like other professionals, have to square up to the new twist in the relationship with their clients, the type of changing demands that the clients would have. You may recall that some policies may have to be tweaked a little bit by brokers and underwriters to cover the emerging realities of the Covid-19. Of course, we must not forget that the Covid-19 is also affecting the human resource and work patterns of members, which as a council we are pointing their attention at.”
The group managing director/CEO, NEM Insurance Plc, Mr. Tope Smart, said, companies whose operations get interrupted and events get cancelled were turning to insurance to absorb the financial blow.
A.M Best Report had earlier said, the coronavirus (COVID-19) has the potential to challenge European insurers on both the asset and liability sides of their balance sheets believing that the biggest impact will come as a result of the economic fallout, as governments and markets react to the virus spread, rather than from direct coronavirus exposures.
The report acknowledges the fact that “despite considerable uncertainty about the ultimate cost to insurers in terms of claims, the insurance industry has long recognised the potential exposures a pandemic poses.
According to report, European insurance companies in general remain well capitalised, but volatility in the wider financial markets could affect insurers’ results and their financial strength.