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Chuks Udo Okonta
The National Insurance Commission (NAICOM) has said the liquidity position of some underwriters is very bad, due to heavy investments on fixed assets.
The Director, Policy and Regulation Directorate, NAICOM, Pius Agboola, who stated this at a programme at Ijebu-Ode, Ogun State, noted that bad liquidity position is impacting on underwriters ability to meet current obligations, stressing that the new capital increase will thus make companies liquid to meet their obligations.
Investigations by this medium revealed that the cash and cash equivalent held by life underwriters have been falling from 2015. Data obtained from the Nigerian Insurers Association (NIA) showed that cash in the hands of life operators fell from N59.97 billion in 2015; N41.08 billion in 2016 and N29.49 billion in 2017.
It was also learnt that 9 out of 27 life operators had less than N1 billion cash to run their operations.
On non life business, cash and cash equivalent was N107.34 billion in 2015; N99.41 billion in 2016 and N102.23 billion in 2017, while 13 out of 41 companies, had less than N1 billion cash.
Industry watchers believed the poor liquidity position is responsible for the inability of some companies to settle claims promptly.
An observed noted that presently, one of the most affected companies which has huge unsettled claims hinging on its neck, had opened register for claimers to write their names, thereby paying claims on first-come-first-serve bases.
The observer also noted that the company had employed a bouncer to intimidate claimers, who go there often to protest.
Another observer told this medium, how claimers went to another company to protest and barricaded the entrance of the firm to prevent staff from going and leaving the company.
Some insurance marketers, also told this medium that the inability of some insurance firms to honour their claims responsibilities, is seriously affecting their business as most insurance prospect who are victims do not want to see any insurance marketer near them.
