By David Akinmola
Stakeholders in the insurance sector have renewed concerns over a widening trust deficit, warning that persistent delays and inconsistencies in claims settlement continue to erode public confidence, even as some operators improved performance.
The issue has again come to the fore following a customer experience involving Mutual Benefits Assurance Plc, where a policyholder cited prompt claims settlement as evidence that insurance can work effectively under the right conditions.
The development reflects a broader paradox within the industry, rising assets, improving premium income, and regulatory reforms on one hand, and persistent skepticism among the insuring public on the other.
The customer, Abdelhamid Abdelrahman, who runs RAP Building Solutions Limited, said his interaction with the insurer over the past four years, including a vehicle claim in 2023, was handled without delay, reinforcing his confidence in insurance as a financial safeguard.
“I had my doubts at some point, but when I had a vehicle claim, it was processed in no time he said, adding that subsequent claims were treated with similar efficiency.
While isolated, industry watchers say such experiences highlight what remains a critical gap in the sector: uneven service delivery across operators.
Responding to the development at the weekend, the Managing Director of Mutual Benefits Assurance Plc, Femi Asenuga, said prompt claims settlement remains central to the company’s operations, noting that the firm has continued to prioritise customer satisfaction despite prevailing economic challenges.
According to him, the insurer has strengthened its claims processing systems and invested in technology to ensure faster turnaround time, adding that building trust through consistent service delivery is critical to deepening insurance penetration.
“Insurance is built on trust, and that trust is earned when claims are paid promptly and transparently. We will continue to improve our processes to meet customer expectations,” he said.
Analysts argue that insurance trust is still fragile, due to historical delays in claims settlement, disputes over policy terms, and weak enforcement of consumer protection standards.
According to them, although some firms have improved turnaround time on claims, the gains are yet to be felt across the broader market, leaving many Nigerians reluctant to embrace insurance products.
Data from the National Insurance Commission (NAICOM) show that the industry has continued to expand in financial terms, with rising assets and premium income, but penetration remains among the lowest globally.
Experts warn that without a consistent and industry-wide claims culture anchored on transparency and speed, growth figures may continue to mask underlying structural weakness.
“Claims payment is the moment of truth for insurance. That is where confidence is built or destroyed, “they noted that customer experience often determines whether policyholders renew or exit the system.
Checks in Lagos and other major commercial centres indicate that many small businesses and individuals still prefer informal risk-sharing arrangements, citing a lack of trust in insurers.
The challenge is further compounded by low awareness, poor understanding of policy terms, and limited enforcement of compulsory insurance across key sectors of the economy.
Operators, however, insist that reforms are beginning to yield results, pointing to improved claims ratios, digitalization of processes, and increased regulatory oversight.
They argue that sustained efforts to strengthen claims management and customer engagement could gradually reverse negative perceptions and drive wider adoption.
Nonetheless, stakeholders caution that restoring confidence will require more than isolated success stories, urging regulators to enforce stricter compliance and sanction erring firms to create a level playing field.
As economic uncertainties heighten the need for financial protection, the insurance industry faces a defining test of whether it can translate improving performance metrics into real, everyday value for policyholders.
For many Nigerians, the verdict on insurance will continue to rest not on balance sheets, but on the industry’s ability to honour claims promptly and consistently when it matters most.
