The Association of Senior Staff of Banks Insurance and Financial institutions (ASSBIFI) wants government’s intervention in the enforcement of compulsory insurance policies to help save the industry from bankruptcy.
This is following reports that insurance companies are groaning under the weight of a surging claims portfolio as more risks crystallize, in spite efforts to stem the tide.
ASSBIFI President, Oyinkansola Olasanoye, told the News Agency of Nigeria on Wednesday in Lagos that the implication of insurance claims rising faster than premium was unhealthy for the industry and the economy at large.
According to Olasanoye, the workers as well as the nation would suffer if the government does not enforce compulsory insurance policies for companies and individuals.
NAN reports that the industry’s total Gross Premium Written (GPW) grew by 12.4 per cent to N226.8 billion against N201.7 billion recorded in 2017.
However, the total claims expenses on the other hand went up by 16.5 percent to N98.9 billion from N84.9 billion recorded in 2017.
She said that government should enhance its supervision on insurance policies and ensure penalties were enforced.
The ASSBIFI president attributed the reasons for claims rising above premium to recession which caused people to undervalue their property.
She said that other factors included fraudulent claims and discounted premium in a bid to compete with others.
Olasanoye said that the implication of dwindling premium would lead to job losses, leaving the job of three workers to be performed by one person, thus adversely affect the health of such worker.
”Not many people insure property like organisations. Many areas are not captured. If this is allowed to continue, it will boomerang against the workers and the economy.
”There are laws that talk about compulsory insurance on public buildings, vehicles, environment, among others, but are not enforced,” the union leader said.
She said it was sad that corporate organisations took insurance policies more than individuals and this had affected insurance premium.
The ASSBIFI boss said insurance firms could be forced to move away from industrial high risk policies if they were not making profit because of frequent calamities.
She said that government policy has a role to play to ensure that individuals take policy so that insurance firms would not depend only on companies.
She said that many small and medium enterprises were collapsing because of lack of insurance policy and the few ones taking insurance were asking for unnecessary discount.
On recapitalisation, Olasanoye said that the government suspended it in 2018 following calls by stakeholders to extend the time.
She said that many insurance firms would use the time to consolidate their mergers and agreement to move the sector forward.