The Nigerian Insurers Association (NIA) has said that insurance companies in the country underwrite insurance policies for kidnapping but with strict guidelines and specialised re-insurance backing.
Olusegun Omosehin, chairman, NIA, said this at a news conference in Lagos, in reaction to rising kidnap cases in the country.
Read also: The unseen nexus: Poverty’s role in Nigeria’s kidnapping epidemic
According to Omosehin, there is an established market for kidnapping and ransom worldwide, but it is a tiny market with strict guidelines for the public to take up the policy. He revealed that some corporate organisations subscribe to such cover, but with a heavy premium, which is sometimes paid in dollars.
According to him, the condition for insurance coverage on kidnap is made stringent and not available on the shelves, so that people will not make mockery of insurance.
The NIA chairman said: “If such policy is opened up for everybody, there can be a situation where someone would kidnap his or her child just to make a claim.
“Due to the nature of kidnapping, especially in our clime, it is not an insurance policy that can be displayed on the shelves, but there are underwriters that are writing the policy through the backing of specialised re-insurance.”
On the 200 percent upward review of premium on compulsory Third-Party Motor Insurance Policy by the National Insurance Commission (NAICOM), from N5000 to N15,000 in January 2023, Omosehin confirmed that the industry witnessed a drop in patronage.
He confirmed that the number of vehicles uploaded in 2023 on the Nigerian Insurance Industry Database (NIID) stood at 3.11 million, as against 3.69 million recorded in 2022.
“Due to the removal of fuel subsidy and increase in fuel price, many Nigerians reduced the number of vehicles they put on the road and the number of vehicle particulars they renew.
“The industry observed this in the number of motor insurance certificates uploaded on the NIID,” he said.
On claims payment, Omosehin said NIA had done three publications already to invite those with genius claims to visit their insurers for settlement.
He stated that the issue of unpaid claims in the industry was mostly tied to the genuineness of the claims presented, as most of the ‘acclaimed claims’ usually have some deficiency that warrants rejection by the underwriter.
The NIA chairman advised Nigerians to understand the value of insurance and see it as necessary, noting that this period of austerity is the best time to buy an insurance policy.
“Insurance is the easiest gift a poor person can give to his family. Someone might not be rich while alive, but at death, his family becomes a millionaire through claims payment.
“One of the challenges of the insurance industry is the level of public trust and credibility. That has, however, been eroded because the industry has pushed for prompt claims payment,” he said.
According to him, the bedrock of every economy is insurance, but the government must create an enabling environment for businesses to thrive.
“We are prepared as a sector to weather the storm and give necessary backing to businesses, institutions and individuals. The nation’s leadership must also be committed to delivering their promises to the citizens.
“Security is key, stability in the political system, structure and foreign exchange market is key for business to thrive in a nation,” he said.
