Former President of the Chartered Insurance Institute of Nigeria (CIIN), Mr. Adeyemo Adejumo, has faulted the Central Bank of Nigeria (CBN), saying its statement about claims settlement by Nigerian insurers does not reflect the true situation in the country.
He, however, observed that if the apex bank does not know the true position of things about the industry, then insurance operators and professionals have a lot of work to do in the area of public enlightenment on activities in the industry, particularly regarding claims settlement.
The CBN had earlier said claims settlement by Nigerian insurers stood at 15 per cent.
Adejumo represented the former Managing Director of NICON Insurance Corporation, Sir Ogala Osaka, at the maiden Insurance Consumers’ Forum Organised by Almond Productions Limited in Lagos recently.
According to him, antagonists of the insurance industry have continued to pull down the industry notwithstanding its worthy strides in recent times even as they have continued to sing the same old song.
“Our industry paid over N9 billion claims to Coca-Cola when I was still in office and claims are still being paid by Nigerian insurers since I retired up till today, but still they say insurers don’t pay claims.
“It is incorrect for CBN to say claims settlement by Nigerian insurers is 15 per cent. If at the CBN level this perspective is held, then we have serious problems that we need to solve very urgently,” Adejumo stressed.
He said he worked in the Nigerian insurance industry for 30 years before retiring two years ago; saying the complaint about insurance companies’ not paying claims has been the same from then till now. “It has been the same story for over 30 years. I am expecting a different story if not a better one and particularly, I hope to see that in my life time,” he said.
According to him, the stories has always been about poor image, that insurance companies do not pay claims, insurance professionals and practitioners are poorly dress as well as lack of trust and confidence issues.
Adejumo, who was Managing Director of Continental Reinsurance Plc (Continental-Re), differed with antagonists of the insurance industry, saying “we have put it in a better perspective.” He recalled that it was the agitation of the industry’s antagonists that made government to impose higher capitalisation on the operators about seven years ago.
During the exercise life, non-life and reinsures were asked to raise their capital bases from N150 million, N200 million and N350 million to N2 billion, N3 billion and N10 billion respectively.
Adejumo also recalled that the said insurance industry’s detractors argued that it was the very low capital base that caused the economy to bleed seriously through insurance premiums ceded to foreign insurers. They also complained of too many insurance operators, which led to the reduction of number of insurance companies significantly all to no avail.
“Insurance cessions abroad are not dependent on capital base of local insurers, it depends on solvency ratio. The number of operators was also cut down significantly but that could not solve the problems,” Adejumo stressed.