Nigerian insurance industry seeks guidelines on civil unrest risk management
By GFDNews Correspondent
The Nigerian insurance industry is mulling new guidelines on risk management and underwriting of political, civil commotion and riots to ensure adequate coverage for such risk.
According to the National Insurance Commission (NAICOM), insurance underwriters should begin rating and charging of adequate premium for insurance coverage on strike, riots and civil commotion.
This is coming against the backdrop of recent unrest across the country triggered by the shooting of unarmed #endsars protesters by the military at Lekki Toll Plaza in Lagos, leading to the destruction of assets of governments and private businesses.
The Commissioner for Insurance, Sunday Thomas said the NAICOM would soon release guidelines to reflect the recent occurrence in the country on premium payable on such risk.
he spoke at the insurance professionals’ forum in Abeokuta, Ogun State, saying insurers would start charging standard rates on the riots, strikes and civil commotion risks to ensure that insurers have enough money to adequately compensate victims when such risks occur.
“However, these incidents are likely to increase insurance claims, thereby exacerbating the already weakened liquidity and capability of insurance companies.
“This has reinforced the need for proper underwriting to ensure insurers are able to settle corresponding claims obligations to cushion the effect of losses on Nigerian households and businesses.
“It is pertinent to note that insurance coverage for Strike, Riot and Civil Commotion (SRCC) clauses, which were redundant in the past and which by competition are mostly offered free of charge must now be adequately rated as an important product for the survival of Nigerian businesses.
“The Commission will be issuing directives to ensure that underwriting is strengthened to appropriately rate and charge requisite premiums so that profitability can be guaranteed and claims are settled promptly without financial strain on the companies,” the NAICOM boss stated.
He maintained that the recent outbreak of protests and civil unrest across the country and the resultant losses exposed the vulnerabilities in government, businesses and individuals to unforeseen events, adding that the incidents further reinforced the value and necessity of the insurance industry.
Thomas noted that the widespread protests, civil unrest and destruction of properties, among others have created further socio-economic hardship and barriers for business profitability and growth.
“As Nigeria reels in the pain of the destruction and losses suffered this year, the Nigerian insurance industry must utilise the opportunity to lead in the quick recovery and restoration of the affected businesses and also showcase its role in reinforcing the economic resilience of individuals, businesses and the economy at large.