Fear, as insurance firms brace up for huge claims

There are palpable fear by firms and private individual whose properties were vandalised and looted by hoodlums if the insurance industry in Nigeria has capacity to meet huge claims by those who insured their properties. Some especially the small and medium enterprises did not insure their operating premises and their wares and can not make claims. However Insurance firms in Nigeria are bracing up for potential claims, following the widespread looting and destruction of properties, vehicles, and other assets across the state. Most government offices, banks, shopping malls, media houses, toll plazas, and private offices were set ablaze by suspected hoodlums after allegations of soldiers shooting in the air to disperse protesters on Tuesday night. 

This triggered scores of skirmishes across the state with several vehicles, buildings, and properties set ablaze or looted by suspected hoodlums. It is expected that when things return to normal, businesses will start to take stock of their losses and someone will have to bear the cost. While most insurance contracts exclude damage to property from war, riots, or other forms of force majeure, it is likely that some will pay for the risks.

According to NAICOM, Insurance companies paid a total non-life insurance claim of N64 billion in 2018 compared to N56.4 billion a year earlier. Out of this total, claims on fire insurance were about N9.1 billion while Motor Vehicle was N17.3 billion. The Insurance sector is currently reeling from the effect of the Covid-19 pandemic, with the sector posting a contraction of 29.53% in the second-quarter GDP report published by the National Bureau of Statistics (NBS). It is likely to drop into a recession when the NBS releases its third-quarter GDP report in a few weeks’ time.

President Muhammadu Buhari addressed Nigerians on Thursday, demanding an end to the violence in parts of the country as a result of the activities of hoodlums who took advantage of the EndSARS protests. “In the circumstances, I would like to appeal to protesters to note and take advantage of the various well-thought-out initiatives of this administration designed to make their lives better and more meaningful and resist the temptation of being used by some subversive elements to cause chaos with the aim of truncating our nascent democracy. For you to do otherwise will amount to undermining national security and the law and order situation. Under no circumstances will this be tolerated,” Buhari said. The President also called for an end to the street protests, requesting that protesters should engage the government. He also asked Nigerians to go about their “normal businesses” while demanding that security agencies protect lives and properties.

“And I call on all Nigerians to go about their normal businesses, and enjoin security agencies to protect lives and properties of all law-abiding citizens without doing harm to those they are meant to protect,” he added. In one of the most viral tweets from an organization that was badly affected by the looting, supermarket chain Spar tweeted a message of hope and optimism despite suffering massive losses from the activities of hoodlums and miscreants. Our Lekki store has been vandalised and looted. But, we acknowledge that this is only a setback compared to the larger issues we are all facing as a nation, and our thoughts and prayers remain with Nigerians everywhere, and for a peaceful resolution to various issues at hand. Rebuilding a supermarket is hard. Rebuilding a nation is even harder. We stand with you Nigeria. Stay focused. Be the solution.”

Categories: Economy,Finance,News

Comments are closed