Nigeria: NAICOM Expresses Concern Over High Volume of Unsettled Claims by Insurance Firms

Mr. Sunday Thomas, the Commissioner for Insurance, has raised alarm over the substantial number of outstanding insurance claims based on recent evaluations and onsite examinations conducted by the National Insurance Commission (NAICOM). Speaking at the 2023 Insurance Directors’ Conference organized by the College of Insurance and Financial Management (CIFM) in Lagos, Thomas urged insurance company boards to collaborate in addressing the issue of unpaid claims.

During the conference themed “The Board and Insurance Business Sustainability,” Thomas revealed that the NAICOM, in collaboration with the Insurers’ Committee, has implemented measures to combat the challenge of unsettled claims. He called on insurance boards to support these initiatives by implementing policies aimed at addressing the issue, stating that the commission is open to considering additional regulatory measures if necessary.

Thomas highlighted several issues observed during the fourth batch of onsite examinations, emphasizing inadequate policies and procedural manuals, non-adherence to existing policies, and insufficient risk profiling methodologies. He stressed the importance of directors improving their understanding of Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) regulations and recommended a focus on addressing risks related to core activities such as underwriting, reinsurance, claims, investment, and information technology.

The commissioner acknowledged that governance challenges often lead to the collapse of companies and mentioned recent penalties imposed on companies utilizing unlicensed intermediaries in violation of the Insurance Act 2003. Thomas emphasized NAICOM’s commitment to fostering innovation, sustainability, and addressing broader policy challenges such as climate risk and digitalization.

Dr. Lucy Newman, CEO of Africa Private Sector Summit, urged insurance boards to prioritize efficiency, diversify revenue streams, and invest in innovation. She recommended engagement with stakeholders, embracing sustainability, and fostering a corporate culture for sustained business operations.

In closing, Mrs. Yetunde Ilori, Chairman of CIFM, expressed gratitude to NAICOM for supporting the insightful conference and praised presenters for their exceptional contributions. She also commended Mr. Edwin Igbiti, President of Chartered Insurance Institute of Nigeria (CIIN), for allowing the college to maintain a level of independence.