Insurance companies brace up for payment of billions in settlement as flood rages

A new era of claims settlement is set to hit the insurance industry as flood take over offices, farmlands, and roads in many parts of the country.

When a similar incident occurred in 2012, insurance firms coughed several billions of Naira to insure companies including Frieslands Foods West African Milk Company (WAMCO).

It is expected that claims arising from the damage caused by this year’s flooding disaster will be higher.

The Director of Partnerships and Coordination at Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Friday Okpara, said at the weekend that the impact of the flood on MSMEs was severe in Anambra, Delta, Cross River, Rivers, and Bayelsa States.

He said: “This is happening at a time when we have high-interest rates, foreign exchange volatility, and surging diesel costs. Prices will continue to surge as production costs are also surging.”

On his part, the President/Chairman of the Governing Council at Nigeria Association of Small and Medium Enterprises, Abdulrashid Yerima, said about one million farmers have been mostly affected by the floods.

“Most of our members greatly affected by the flood are farmers who account for 20 percent of the 5.1 million registered MSMEs,” said stated.

READ ALSO: Nigerian govt’s response to flooding weak, slow — Moghalu

The Vice President, External Relations and Stakeholder Management at Olam Agri, Ade Adefeko, revealed recently that the company’s 10,000 hectares of land in Nasarawa with an investment worth about $140 million had been submerged by floods.

The Nigerian Meteorological Agency said in its latest report that the worst was yet to come.

NiMET had earlier warned that at least 32 of the 36 states in Nigeria, including Kaduna, Borno, Delta, and Bayelsa, would witness severe flooding this year.

Already, Benue, Jigawa, Nasarawa, Taraba, Kano, Bauchi, Niger, Anambra, Kogi, and Ebonyi are among the worst hit by the floods this year.

The settlement is already reflected in the performance of insurance companies on the Nigerian Exchange Group (NGX).

Checks by Ripples Nigeria revealed that the insurance index has dropped by 12.11 percent from September 4 to October 24.

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