The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, has charged insurance companies to pay promptly genuine claims that have been duly verified and due process followed as that is the major reason they exist in the first place.
Also, Mrs Ahmed urged the National Insurance Commission (NAICOM) to ensure that Insurance companies meet their obligations to policyholders as claims payment determines the valuable structure of the industry in the economy.
The Minister who stated this at the commissioning of the NAICOM Portal in Abuja over the weekend decried the current low level of insurance penetration in the country and called for urgent action to remedy the situation.
“Meanwhile, you will agree with me that the unsatisfactory response to the settlement of claims by underwriters had greatly contributed to the prevailing poor public perception and lack of trust and confidence in the insurance industry.
“Indeed, prompt claims payment is the best advertisement for the industry, therefore all genuine claims that have been duly verified and due process followed should be paid promptly.
“The Commission must put in place mechanisms to ensure Insurance companies meet their obligations to policyholders by paying claims promptly as that is the major reason they exist in the first place. Claims payment determines the valuable structure of the industry in the economy,” Mrs Ahmed said.
She expressed worries about the current insurance penetration in the country, arguing that “a measure of the contribution of Insurance to the Gross Domestic Product (GDP) of 0.88 for 2021 is very low. This indicates a low Insurance sector development contribution to the National Economy”.
However, she noted that the development shows that there abound opportunities for growth in the market and charged insurers to develop new innovative products based on data and customer preferences and introduce new channels of distribution beyond the traditional channels to reach new segments of the market.
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The Finance Minister advised NAICOM on the need for cooperation with other agencies of government to enforce compulsory insurance in the country.
She added that stakeholders in the industry must consciously and intentionally spread the reach of insurance from the major cities and few states to other regions of the country, especially the rural areas.
Low penetration in the retail end of the market, Mrs Ahmed noted, must also be addressed through vigorous drive of inclusive Insurance like micro insurance and takaful.
In addition, she said deliberate attention must be given to the low insurance literacy and education in the country, stressing that strategies must be put in place for insurance education, awareness and enlightenment.
“Massive sensitisation must be done on both traditional and new media on the benefits of Insurance. I want to advise that insurance education should be introduced in the education curriculum from Primary to Tertiary Schools,” Mrs Ahmed further stated.
The Minister of Finance, Budget and National Planning expressed the hope that the commissioning of the Portal would serve as a springboard for industry-wide adoption of technology and innovation for efficient and effective service delivery, ease of transacting business, customer experience and satisfaction.
She encouraged the insurance industry to adopt new and disruptive technologies like mobile technology, cloud computing, Artificial intelligence, Blockchain, Data Analytics and Internet of things in driving and supporting its business.
Mrs Ahmed commended NAICOM for being in the forefront of this and for incepting initiatives in this direction including Guidelines for Web Aggregators and Regulatory Sandbox, introduction of BIMA Lab Insurtech Accelerator Programme, and called for regulatory framework for Insurtech companies to guide and supervise their operation without inhibiting their innovation.
She averred that with the commissioning of the NAICOM Portal, the long-overdue digital transformation of the insurance industry has begun with the attendant effect of increased penetration, reduction in the numbers of fake insurances, efficient service delivery and improving public trust in Insurance.
The Commissioner for Insurance, Mr Olorundare Sunday Thomas told the Minister that portal is one of the initiatives of the Commission being pursued to deepen the insurance market and increase the penetration to the level that is consistent with the nation’s economy.
He stated that “with the completion of the Portal, there will be process efficiency and faster processing time as applications and supporting documents are submitted online, applicant’s account is updated with the status of the application as it progresses and there is effective Real-time communication between NAICOM and the applicant.”
He added that the Portal also provides a Platform for interconnectivity by all industry stakeholders to support real-time aggregation of data on policies at the time of underwriting and policy issuance.
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