Business

Insurance Industry laments, says sector is at risk

Insurance Industry laments, says sector is at risk
By Editor

The Nigerian Insurance Association (NIA) has said the increase in fraud claims in the insurance industry is affecting the survival of the business.

Director General of the Association, Mrs. Yetunde Ilori, while disclosing this at a media briefing in Lagos, attributed the ugly trend to the current economic challenges faced by the nation.

In her words, “Due to the harsh economic situation, this fraud is real and it is on the high side. Apart from other issues that the insurance industry is grappling with, fraud is a major issue and it’s killing our business.

Ilori explained that some people would insure an asset with mutilple companies in order to lay claims from the companies when they lose the asset.

While giving an example, she said, “A banker made a claim to an insurance company that he was involved in a fire accident leading to loss of his car and laptop. On our investigation, we discovered that he insured with about four different insurance companies and he has filed for claims in the different companies.

“The Association had pity on him and went further to gather the insurance companies for his claims payment but realized it was all false.”

Read also: Senate passes new CAMA bill, ‘biggest business reform bill in 28 years’

Also speaking, Chairman of NIA, Mr. Eddie Efekoha, said those who indulge in insuring an asset with more than one insurance company could have a fraudulent intention.

According to him, “If you have interest in an asset and insure it with two bodies or more, then there might be a fraudulent intention. You are paying premium for one asset to more than one insurance company, it means that something is on your mind and that is a fraudulent act.

“You can not suffer more than the loss of an asset and that takes us to the principle of infidelity. If I suffer a loss of a car, I should not be expecting to be paid for two cars, I should only be paid for one car. Why will I insure it with more than one insurance company if I have no fraudulent intention?

“However, the laws of insurance take care of it. The claim will be paid once not twice or thrice and that claim being paid will be shared by the companies concerned. So that’s the law, if truly the asset existed.”

 

RipplesNigeria… without borders, without fears

Click here to join the Ripples Nigeria WhatsApp group for latest updates.

Join the conversation

Opinions

About the author

Editor

We are an online newspaper, very passionate about Nigerian politics, business and their leaders. We dig deeper, without borders and without fears.