The Nigerian insurance industry is grappling with a significant volume of unresolved customer complaints, predominantly concerning life, group life, and motor insurance policies. A recent analysis of data published by the National Insurance Commission (NAICOM) reveals a staggering N22.65 billion in disputed claims across these three categories. Group life assurance policyholders account for the largest share of the disputed sum, claiming approximately N21.01 billion, plus an additional $11.897 million. While life insurance policyholders lodged the highest number of individual complaints, exceeding 380, their total disputed amount reached N1.145 billion. Motor insurance policyholders, on the other hand, reported N180.24 million in disputed claims, with some claims also denominated in US dollars, totaling $2.2 million. This substantial backlog of unresolved claims raises serious concerns about consumer protection and the financial stability of the insurance sector.
Life insurance, a crucial financial safety net for families, provides a death benefit to designated beneficiaries upon the policyholder’s demise. This payout helps replace lost income and cover essential expenses. Group life insurance, typically purchased by employers, offers similar benefits to employees’ dependents. In Nigeria, the Pension Reform Act of 2014 mandates employers to provide group life coverage equivalent to three times the employee’s annual emolument, aiming to mitigate the financial impact of death on families. The considerable number of complaints related to group life insurance raises questions about employers’ compliance with this legal requirement and the effectiveness of the claim settlement process.
Motor insurance, another significant area of contention, covers vehicles operating on Nigerian roads. The various types of motor insurance include third-party liability coverage, comprehensive coverage, and goods-in-transit coverage. The prevalence of complaints in this category underscores the challenges faced by policyholders in receiving timely and adequate compensation for accidents, damages, and losses. The inclusion of dollar-denominated claims further complicates the issue, potentially reflecting difficulties in settling claims involving foreign-registered vehicles or international transactions.
The NAICOM data reveals a total of 1,571 complaints lodged against 46 insurance companies. IGI leads the list with 327 complaints, some dating back to 2020 and 2021, highlighting persistent issues with claim settlement. African Alliance Insurance follows with 282 complaints, primarily from annuitants, likely stemming from recent management changes and the appointment of an interim board. Standard Alliance Insurance also faces a significant number of complaints, totaling 229. On the other end of the spectrum, Stanbic Insurance and Heirs Life recorded the fewest complaints, demonstrating variations in performance and customer satisfaction across the industry. The wide range in complaint numbers suggests inconsistencies in claims processing efficiency and customer service standards among different insurance providers.
While the NAICOM data provides a valuable overview of the complaints landscape, some entries lack specific disputed amounts, making a comprehensive assessment of the total financial impact challenging. This omission hinders a complete understanding of the scale of unresolved claims and the potential financial burden on both policyholders and the insurance industry. A more detailed breakdown of the disputed amounts, including those not explicitly listed, would be crucial for a more accurate analysis of the situation.
NAICOM has adopted a zero-tolerance policy towards non-payment of claims, recognizing the detrimental impact of such practices on public trust in the insurance sector. The regulator has emphasized the seriousness of this issue, warning that failure to settle claims promptly could lead to license revocation. This strong stance underscores NAICOM’s commitment to protecting policyholders’ rights and ensuring the financial stability of the industry. The Commissioner for Insurance, Olusegun Omosehin, has reiterated this commitment, stating unequivocally that insurers unable to honor legitimate claims have no place in the Nigerian insurance market. This firm stance is essential for fostering confidence in the sector and encouraging timely and fair claim settlements.
