Many Nigerians are wary of buying policies because of the fear of non-payment of claims when they are due. Experts have, however, advised insurers to do better in claims payment. Omobola Tolu-Kusimo reports.
Insurance is a business of utmost good faith. Although the duty of good faith and fair dealing applies to the insurer and the insured, experts say courts when looking at an insurance contract, have viewed its requirements as a one-way street in favour of the insured because he or she needs the protection from the insurance company, and not the other way around.
According to experts, an insurance company has the duty of performing its contractual obligations to an insured in good faith and not trying to take advantage of vulnerabilities created by the sequential character of contract performance – the insured pays premium and sometime later the company may have to pay a claim. In all, the principle of utmost good faith, states that the insurer and the insured must disclose all material facts before the policy inception.
But insurers have been perceived not to pay much attention to the duty of good faith and this has made many not to have confidence in insurance companies.
Despite the hard work done by insurers, people are still weary of buying insurance policies as they fear non-payment of claims when it crystalises.
Group President/Chief Executive Officer, Standard Insurance Consultants Limited, Dr. Ahmed Salawudeen, said insurance business would grow when insurers practise utmost good faith.
Salawudeen, a stakeholder in the industry, said insurers have not been honest enough in their claims drive.
He said: “Some insurers are not honest. Insurance is a business of utmost good faith. That is to say, if anybody insure with you and a claims come up, you have to honour the claim. But do they? No. And that is why the business is going down.
“The problem is that what we have in the industry now is rat race. The young insurers don’t want to go through the system the way they ought to. The younger ones don’t want to go through the right road. Everybody is in a hurry and it’s a big problem for Nigeria. In the early days, the insurance company finance banks and this is how it is all over the world. But Nigeria is different.
“The insurance companies are trying to recapitalise, which is very good, but what is really important is building trust. Insurance is a business of trust. If there is no trust, there is no insurance. In Nigeria a lot of people don’t have confidence in insurance. Why? Because insurance companies are not living up to their responsibilities. The companies must be able to settle claims as at when due for the industry to grow. When they are not doing that, the public will not have confidence in them.
“The bodies and associations in the industry like the Chartered Insurance Institute of Nigeria, the Nigeria Insurers Association, the Nigerian Council of Registered Insurance Brokers and others have to work together. But at present, everybody is on his own. We cannot survive under such a condition. We can only survive when we are working together effectively. Insurance business is a great business. It has impact on economy. Without insurance, nothing can be done. But in every civilised society, it is the responsibility of the companies to make sure that any claim emanating is settled.
However, the problem remains that the public does not have confidence in insurance. In my company, we make sure that any business we are passing goes through a reputable insurance company that will not defect in case of claims. I have been a chartered underwriter since October 1976, so I know what I’m talking about. Insurance companies should work to make the public have confidence in them.’’
The Managing Director, Anchor Insurance Limited, Ebose Augustine explained that sometimes insurance companies are slow to pay a claim when they discover that it is fraudulent.
He maintained that as insurers, they are in the business of paying claims that would restore people and businesses to the position they were before a loss occurs.
“There are few arguments that sometimes arise from claims. The onus is on a policyholder to prove the claim is genuine. For instance, there was a claimant who claimed his car was burnt. Upon investigation, we found that the car that was burnt was not the car that was insured. The car that was insured was a saloon car but he brought a Mazda to us as the car that was burnt. So people do a lot of things to make money.
“Insurers also try to be careful not to pay fraudulent claims because insurance is a pool of funds, which must not be mismanaged. We have seen many fraudulent cases over time and they come in different ways.
“This notwithstanding, we still pay claims. For us at Anchor, we do not owe any claim. We are very serious with our claims responses and we made the process for policyholders seamless,” he added.
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