A time of unforeseen circumstances causing huge damages to insured objects is a time to gauge the preparedness and evaluate the financial capacities of the insurers in managing the risk events vis-à-vis indemnifying for losses suffered by their clients. As the dust from the #EndSARS protests settles down, it is a time of reckoning for insurance companies in Nigeria.
The hijacked #EndSARS protests have come and gone, but the smoke raised by the trailing losses/damages are still with the insured and are quite humongous to sink the boat of the entire insurance industry put together, if not properly managed.
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From the emerging reports, Lagos state alone requires a whopping sum of N1 trillion to resuscitate the vandalized infrastructures. The concern expressed by many stakeholders is the total costs accruable if all the vandalized infrastructures were fully insured – as the resultant claims could swallow up the insurance industry.
It is not yet clear how much of these assets were appropriately insured but considering that our insurance culture is quite low amongst both the private and public sectors, there is a strong likelihood that some of the vandalized assets might not have been appropriately insured or insured at all.
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Nairametrics recently profiled and reviewed the capital base of some frontline insurance companies in Nigeria and are persuaded to believe that they have the capacity to withstand the vagaries of the emerging losses and still stand strong, considering their excellent past claims settlement history to date.
Leadway Assurance
It is a privately-owned insurance company, whose financial capacity grew over time and can now underwrite risks of very high costs, as regards heavy industries like Oil and gas and big manufacturing concerns.
- It has a capital base in excess of N45 billion, according to its 2019 financial statements and a gross premium was about N89billion.
- In 2019, it settled claims amounted to about N38.5billion.
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Axa Mansard Insurance
It was formerly known as Guaranty Trust Assurance Plc, following the acquisition of its majority shareholding by Guaranty Trust Bank Plc.
- Results for the period ended 31st December 2019 reveal that the company has shareholders’ funds of N30billion and a gross premium income of about N41.6billion.
- About N17.5billion was settled as claims within the period.
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AIICO Insurance Plc
This is one of the largest Life Insurance companies in Nigeria and a primary underwriter for general insurance businesses, as well as a key player in the Oil and Gas industry.
- As of 2019 year-end, the capital base of the company was N27.9billion, with a gross premium income of N50billion.
- N25.4billion was settled as claims.
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Custodian and Allied Insurance Plc
- As of December 31, 2019, the company was capitalized to about N19billion, with a gross premium income of N25.2billion.
- It settled the sum of N2.3billion as claims from clients within the period.
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Linkage Assurance Plc
The company is a product of a merger of two major insurance companies – Central Insurance Company Limited and Linkage Assurance Plc, to form a new and bigger Linkage Assurance Plc.
- Results for the period ended 31st December 2019 indicates that the company has shareholders’ funds of about N19billion and a gross premium income of about N6.3billion.
- About N1.7billion was settled as claims within the period.
Bottom line
There is no doubt that the amount of damages is quite huge but the industry has the capacity to absorb the financial shock that could arise from the legitimate resultant claims connected with the hijacked #EndSARS crisis, as the frontline insurance companies are reasonably capitalized with excellent claims settlement histories.
