By Sola Alabadan
The Chairman of Nigerian Insurers Association (NIA), Mr. Kunle Ahmed says the insurance companies in the country are committed to a timely processing and payment of all valid claims, so as to build public trust and ensure the sustainability of the sector.
Speaking at the first quarter media chat of the association on Tuesday in Lagos, Ahmed emphasised that the hallmark of any insurance company worth its license is the payment of claims.
Despite the N536.5 billion claims paid by the industry in 2023, which is about 53% of the gross written premium for that year, he stated that there is still significant improvements to be made on the ease of making a claim and general improvement of the claim process.
He also informed that the NIA would soon be inviting Fintechs to make a pitch on different innovations that will ensure that the claim process is shortened leading to improvement in the timely payment of claims.
The stricter enforcement of Third-Party Motor Insurance by the Nigeria Police Force, which commenced on February 1, 2025, according to him, has been generating significant effects on both the insurance industry and the policyholders.
While there has been substantial increase in the purchase of third-party motor insurance policies, he said “the increase in uptake implies increase in the volume of claims and overall potential liabilities of insurance companies. This will necessitate that insurance companies enhance their claims processing efficiency and customer service capabilities to handle the increased workload and ensure policyholder satisfaction.”
He added that “Timely and efficient payment of claim obligations will gradually lead to increased public trust in the insurance sector. Interestingly, the increased awareness and enforcement can create opportunities for insurers to develop more attractive and user-friendly third-party insurance products and leverage technology (Insurtech) to improve service delivery.
The stricter enforcement of third-party motor insurance in Nigeria, he stressed, also presents challenges related to claims processing and the need for
enhanced customer service.
He maintained that the effective enforcement also requires closer collaboration between the National Insurance Commission (NAICOM), the Nigeria Insurers Association (NIA), other industry stakeholders and the Nigeria Police Force to ensure smooth implementation, whilst addressing arising issues. NIA is currently engaging the Nigerian Police Fore and the Federal Road Safety Commission to ensure seamless enforcement, he further pointed out.
The NIA boss also applauded the decision of the National Insurance Commission (NAICOM) to be publishing the names of insurance companies with outstanding claims and the details of these complaints, saying NAICOM is promoting transparency and demonstrating commitment to protecting the interests of policyholders.
“It sends a strong message to insurers that the regulator is taking the issue of unpaid claims seriously and is willing to take concrete action to ensure that policyholders receive their due compensation as at when due.
“Whilst most companies will meet their claims obligations, it is believed that the threat of being publicly named and shamed, coupled with potential sanctions for non-compliance, is a strong incentive for insurance companies to prioritise the settlement of outstanding claims and improve their claims-handling processes. NAICOM has explicitly stated its zero tolerance for delays in settling genuine claims and has warned that non-payment could even lead to the cancellation of licenses.
“The publications can also help to identify systemic issues within specific insurance companies or the industry as a whole that contribute to the high volume of outstanding claims. This allows NAICOM to develop targeted regulatory interventions to address these underlying problems.”
