Free endorsements of riot, strike and civil commotion to standard policies of fire and comprehensive motor insurance aided by competition, has reached the cliff edge and the consequence of continuing has attracted the intervention of the National Insurance Commission.
The Commissioner of Insurance, Mr. Sunday Thomas, with a chopper view of mass dots of free endorsements on the insurance landscape and the financial implication on underwriting, has raised the warning flag after the virtual aerial observation, to signify an end to the practice which before the losses that trailed the protest, were offered without a blink.
The signal that free endorsements on policies has landed on a yet to be certified category of hard market was first streamed by the managing director, Consolidated Hallmark Insurance Plc, Mr. Eddie Efekoha, at a webinar for its partners in Lagos. He said the stream of claims attached to free endorsements meant insurers took the wrong approach to earn and keep businesses and he squared it: “Today we know better.”
Thomas, who was at the Professional Forum of the Chartered Insurance Institute of Nigeria at Abeokuta, Ogun State, explains more, “It is pertinent to note that insurance coverage for strike, riot and civil commotion clauses, which were redundant in the past and which by competition are mostly offered free of charge must now be adequately rated as an important product for the survival of Nigerian businesses.”
On this premise, the insurance czar said: “The Commission will be issuing directives to ensure that underwriting is strengthened to appropriately rate and charge requisite premiums so that profitability can be guaranteed and claims are settled promptly without financial strain on companies.”
The review he said, would also accommodate insurance response in the future to losses from a disaster like the pandemic, taken its bearing from the losses arising from the Covid-19 pandemic, which he stated, were not adequately covered by insurance; and then forge an insurance guideline that would make conventional insurance products time bound.