Claims paid do for the insured what first responders do for victims of any dimension of disaster. Their swift response to situations where the victims are not in a position to help themselves lives an impression that is integrated into the memories of the people in need of immediate intervention.
In the case of insurance the intervention is financial for the victims that are covered against the risk that has taken a hit. Lloyd’s of London rolled out quick response to claims payment by setting up space for claims payment shortly after the 1906 San Francisco earthquake. That first time quick intervention act still resonates with Lloyd’s.
The global insurance market has built on that and each market has enacted statutes that demand underwriters pay within a time frame and, Nigeria follows the order of legislation guided early response to claims in certain classes of business. Improving on the sole reason why they are in business which is to pay claims, underwriters make quick claims payment part of their unique selling proposition.
In the Nigeria market claims in the bracket of billions of Naira are paid out to corporate and individual policy holders every year but the significance of the market still plummets in the minds of the populace; sometimes the contentment of claims paid pales out because of the long period it takes to get the claims cheque in mostly big claims. This disconnect notwithstanding, the yearly high naira figures allude to the fact that Nigeria insurance market pays claims .
Getting further into the market, Businesspost.com.ng spoke with the managing director Fairdeal Public Adjusters Limited, Mr. Ralph Opara, whose picture appears in the story, also a past president, the Institute of Loss Adjusters of Nigeria:
Is claims payment a good influencer of insurance, how much of this has been added to underwriting?
The sole reason for insurance is protection against unforeseen loss occurrence and since claims payment is the major route for compensation, it is certainly a good influencer. For instance to function properly, the need created by drawing attention of prospective consumers must be backed by good underwriting so that appropriate premium is charged for the risk being covered and adequate fund is built up for payment of claims as they arise.
Claims payment is like a first responder in an insured event, but does the stretch of time to pay help the purpose to the insured?
Like the axiom …justice delayed is justice denied. So also, prompt payment of claims is very desirable for the full benefit to be reaped.
What corrective measures could be triggered to help?
A number of underwriters in Nigeria are undercapitalised and therefore are not adequately prepared to pay genuine claims promptly. There is therefore need for a mechanism to push such reluctant underwriters to pay adequately and promptly. The frontline agency to achieve this is the broker who has a twin role to place insurances with underwriters that can meet with their responsibilities and also pursue claims as they arise.
However, the professional that can really ensure that there is no undercut of the amount payable is the public adjuster. If a public adjuster is appointed to work along with the broker, the claimant is sure to receive adequate and prompt compensation. Public adjusting is newly being introduced to the Nigerian insurance market and not so popular yet. Many brokers and claimants think it is an additional cost to the claimant but it is not as the public adjuster will be paid a small percentage of the amount that he would have lost, that is, a percentage of the amount that he would otherwise have been denied