Insurance companies in Nigeria are facing one of the most challenging moments of their existence following the massive destruction of lives and properties that followed the hijacked #EndSARS protest across the country.

For a sector struggling to meet a recapitalization deadline after months of Coronavirus-induced lockdown that placed a heavy load on its shoulders, meeting up with yet another deluge of claims obligations can be everything but easy.

However, insurers are already reviewing their books, putting their financials together in ensuring that claims are duly paid to victims of the protests when cases are officially filed, Business Hallmark can authoritatively report.

Protests against police brutality had erupted in major cities across Nigeria, with demands later evolving beyond ending police excesses to calls for good governance across board.

But events took a dramatic turn hours after Governor Babajide Shanwo=Olu imposed a 24-hour curfew across Lagos State, when suspected soldiers opened fire on defiant but armless protesters at Lekki Toll Gate, killing and injuring yet to be ascertained numbers.

The reprisal attacks that followed the next day grew bigger than the disturbances that prompted the curfew, with Lagos experiencing a near state of anarchy that saw suspected hoodlums embark on looting and vandalism spree. Other cities also had their shares of the menace in different degrees.

While public buildings, police stations, banks branches, Federal Roads Safety Corps (FRSC) offices among others were vandalized and set ablaze, shops were robbed of goods worth billions of naira in the process.

Operators say the expected claims may be huge enough to swallow the industry if government fails to support in meeting claims obligations, expected to run in billions of naira. From emerging reports, Lagos State alone requires a whopping sum of N1 trillion to resuscitate the vandalized infrastructures.

“We expect the insured loss to run into billions of naira”, said Ganiyu Musa, chairman, Nigerian Insurers Association (NIA).

Ganiyu who doubles as the managing director/chief executive officer of Coronation Insurance Plc added, “As we speak, loss adjusters are already on sites and trying to come up with estimates of some of the facilities with the level of claims. And most of our members are already receiving claims notification.”

It is, however, not yet clear how much of these assets were appropriately insured but considering that insurance culture is quite low amongst both the private and public sectors in Nigeria, analysts see a strong likelihood that some of the vandalized assets might not have been appropriately insured or insured at all.

“Nigeria does not have insurance culture. If it were in the western world insurance companies would have been biting their fingers now. Here people don’t even have confidence in the insurance companies,” said business analyst, Mr. Olusesun Okunade, during a Star FM breakfast live show monitored by our Correspondent.

The executive secretary, Nigerian Council of Registered Insurance Brokers (NCRIB), Mr. Fatai Adegbenro, described the incident as a good omen for the industry to prove to the insuring public that insurance works.

Adegbengo, while urging the insurers to rise up to their obligations, said, “When something like this happens and claims are paid as quickly as possible to affected insured, it builds people’s confidence in the industry.

“The incidence is a good omen for the industry. It is an opportunity for the industry to prove to the Nigerian insuring public that insurance works in Nigeria.

However, on his part, former president of the Association of Registered Insurance Agents of Nigeria (ARIAN), Mr. Gbadebo Olamerun, said what the industry should do now is to educate the insuring public.

Olamerun, in a telephone interview with Business Hallmark, regretted that “most of the victims of the protest may not get adequate compensation from their insurers because most of the losses fall within riot cover which most of the insurance companies in Nigeria do not offer. Most of them do not have comprehensive insurance cover.”

He added, “Except the big multinationals like Shoprite and Justrite with comprehensive insurance policies, the smaller businesses that were affected can only get compensation out of pity, in which case those who suffered a loss of about N40 million may be paid about N10 million or so due to their long relationship with the underwriter.

 Apart from the number of people that lost their lives or got injured who may claim from health insurance, public and government assets razed by fire, shopping malls looted and vandalised, private businesses looted and vandalised, as well as private residents and businesses of politicians that were also affected, have claims to make from insurance.

The #EndSARS loss incident is covered in insurance under policies that extend to riot and civil commotion. Accordingly, fire and burglary or commercial property insurance, if extended, covers damage that results from vandalism, rioting and civil commotion. These policies specifically include coverage for acts of looting in connection with a riot or civil commotion.

Underwriters to the rescue

Although there are palpable fears among victims of the crisis about the ability of insurance industry in Nigeria to meet the expected huge claims, the body language of these firms speaks about their readiness to pay the claims promptly.

Already, companies like Coronation Insurance Plc; AIICO Insurance and Consolidated Hallmark Insurance Plc have issued various statements regarding their preparedness to pay claims to the victims of the riot. Other underwriters are waiting for the victims to file in their report for upward procession of their claims.

Coronation Insurance Plc, in a statement seen by Business Hallmark, confirmed the company’s readiness to meet their claims obligations to the victims.

The statement read: “At this time, Coronation Insurance would like to reassure our clients and the general public that, following the recent monumental loss of human life and damage to property and assets across the nation, we have shifted to our highest gear to get our customers the most appropriate help as quickly as possible at this time of need.

“We believe that insurance companies must ensure their clients do not have to wait for assistance after a disaster occurs by proactively collating information of damage and losses as well as responding to claims with speed and precision. We are well aware that our customers are dealing with numerous difficulties at this time and the last thing they want is a painful and challenging claims process.

“We want our customers to return to their normal way of life as soon as possible and have put in place a claims response platform for real-time communication and easy sharing of loss evidence to fast-track claims processing.

“Our emergency payment methods will assist to relieve your immediate spending pressures and help you get back on your feet within the quickest period of time.”

“Please use our dedicated help-lines for emergencies and you can also ask to speak to one of our experts for advice and assistance on what to do next. Our channels are available 24/7 so that you can make enquiries and report claims seamlessly. We encourage you to use them to minimise physical visits.”

Similarly, AIICO Insurance Plc, a composite insurer and leading insurance company in Nigeria has stated its readiness to meet its obligations to customers who have policy covers for incidents that occurred during the recent riots. Its managing director/CEO, Mr. Babatunde Fajemirokun, noted that the riots have had tremendous effect on individuals and businesses, both small and large.

Fajemiroku said, “The losses incurred in terms of human lives and assets are enormous. Our thoughts and prayers are with those who have been affected in one way or another.

“I assure you that as a company; we are doing all that is necessary to see our customers through this phase. We are asking our customers with covered cases to contact us for immediate assistance with claims”.

He added: “The year 2020 and all we have experienced as a nation are tailwinds, propelling us forward and helping us to evolve. Indeed, the injection of new imagination, energy and innovative thinking into our national discourse will take us there.”

Also, Consolidated Hallmark Insurance Plc (CHI) Plc has said it is set to settle insurance claims for policyholders whose policies cover Strike, Riot and Civil Commotion (SRCC) extension.

In a mail sent to all its policyholders and stakeholders across the country, the underwriter noted that, such claims, like all others, would be expeditiously handled to ensure that customers are back in business as quickly as possible.

While calling on the victims of the #EndSARS protests to file their claims through the company’s website and customer care centre, it assured the aggrieved policyholders that they would be attended to passionately.

“May God console the families of citizens who have lost their lives and there are certainly glorious days ahead,” the company stated.