’Insurers may seek FG’s support to pay claims from #EndSARS losses’

Mr. Ademayowa Adeduro, MD/CEO, Law Union &Rock Insurance 

Insurance companies may seek Federal Government’s support to pay claims that may arise from losses emanating from destructions of lives and properties during #EndSARS protests nationwide.

Investigation by showed that the losses caused during the protests in various parts of the country are monumental and the claims that may likely emanate from the losses for settlement by insurance companies are colossal.

While some Industry operators who spoke in an interview with our correspondent, expressed displeasure on the incidence, others said the situation is an opportunity for the industry to prove to the insuring public that insurance works in Nigeria.

The Managing Director and Chief Executive Officer of Law Union & Rock Insurance, Mr. Ademayowa Adeduro, described the destructions as first of its kind since the Civil war and recommended that the industry should seek for Federal Government support to meet its obligations.

“The loss is colossal and I’m not sure whether we have witnessed this before apart from the Civil War era. The destructions are massive and because there was curfew, the perpetrators had a field day going around looting, setting houses, banks, shops on fire. Insurance industry is going to pay heavily for it.

“I don’t know as an industry why we should not request for government support for this. Government should have prevented the situation not to go out of hand as it happened. Government should have envisaged this kind of thing and do everything within her power to prevent it,” he said.

Mr. Adeduro who expressed sadness on the situation, said the affected clients with genuine insurance cover, will not be allowed to lick their wounds, adding that they will be compensated.

According to him, “Insurance companies are going to pay because some of those clients whose properties are affected, shouldn’t be left to lick their wounds without adequate compensation in one way or the other depending on the outcome of Loss Adjusters’ investigation as per the terms and conditions that guides insurance policies. For instance, some policies may have Riot, Civil Commotion, and Strife as terms and conditions. So if you don’t have these as terms and conditions in your policy, you will not be compensated. It is possible if the situation is not properly handled, it’s going to weaken the insurance industry.

“But bye and large, I think the industry is going to sit together as a body and demand for government’s support. The support can come in form of tax holiday; it can come in form of long term loan for the operators to be able to pay the claims and write it off or pay it back in future because the situation is capable of sinking or throwing some companies off balance especially now the companies are going through recapitalization.”

Also speaking, the General Manager, Marketing and Corporate Communications, Sovereign Trust Insurance Plc, Mr. Segun Bankole, said although the incidence is going to affect the industry negatively, will open the eyes of a lot of people to the importance of insurance.

Mr. Bankole who described the timing of the incidence as “very bad” for the industry especially with the ongoing recapitalization, noting that this is not the right time for this to happen for the industry.

“It is unfortunate that this is coming in a very bad time; the time when the industry is undergoing recapitalization and with the situation on ground, they are going to be paying out a lot of claims and how do you now get funds to recapitalize?
“Obviously, by the time you begin to pay claims, it will affect your bottom-line; it will affect your reserve and this is not a very good thing for the industry. We just hope that insurance industry will now know the importance of proper rating. This situation has thrown up a lot of issues for the industry: how well do you rate? How well do you value your business? But in all, this is not the good time for all these to happen especially now that operators are trying to cross the first hurdle of the recapitalization exercise.

“When you begin to have claims in billions and you begin to ask yourself, how do we attract investors because if investors are bringing money for you to recapitalize and the next time you are using the money to pay claims; how do you account for that? Insurance is a business, though claims payment is part of the business – you need to pay for office, you need to pay for staff salaries, you need to pay for other overheads to keep the business running and at the end of the day those who invested in your business expect that they will make profit.  So when you use all your our capital to pay claims, how do you bring investors into the industry?

“Well, the good thing about this is that a lot of them might have reinsurance treaty in place. With the right reinsurance treaty in place, a lot of losses will be taken up by reinsurers. But if you don’t have the right reinsurance treaty in place that is when there will be a problem. But with the right reinsurance treaty in place, obviously, the burden will be on the reinsurance depending on your percentage of your involvement in that business,” Mr. Bankole said.

Also speaking, the Executive Secretary, Nigerian Council of Registered Insurance Brokers (NCRIB), Mr. Fatai Adegbenro, described the incidence as a good omen for the industry to prove to the insuring public that insurance works.

He implored the underwriters and the brokers to put a call to and reach out to their clients who are affected and when the situation settles, quickly send Loss Adjusters to go and assess the state of damage and ensure that compensation are paid to them within two weeks

Mr. Adegbengo said nobody appreciate insurance until something like this happens, adding that when something like this happens and claims are paid as quickly as possible to affected insured, it builds people’s confidence in the industry just as he implored insurers to rise up to their obligations.

According to him, “the incidence is a good omen for the industry. It is an opportunity for the industry to prove to the Nigerian insuring public that insurance works in Nigeria. I would implore all the brokers and underwriters to chek their records and their books and quickly reach out to their clients who are affected, put a call through to them and when the situation settled, quickly send Loss Adjusters to go and assess the state of damage and ensure compensation is paid to enable them get back to business.

“Nobody appreciate insurance until something like this happens. When something like this happened and claims are paid as quickly as possible, it builds people’s confidence in the industry. I will implore insurers to ensure that those affected who have genuine and adequate policies are compensated within two weeks.

“I think insurance industry will rise to prove that insurance works in Nigeria and that there is no cause for alarm, that why they’re in business is to pay claims. Insurance business is to pay claims. People will not insure if they are assured that they are no claims for losses. It’s because there is possibility of loss, that is why people take insurance policy. When losses occur, there should be compensation.”