… as hard times hit industry
The management of Consolidated Hallmark Plc is currently battling some fraud allegations levelled against it by some of its policy holders.
The alleged fraudulent activities include failure to pay claims as promised and unnecessary delay of claims, among others.
One major case is that of some insured goods belonging to Mr. Daniel Ige, Chairman, INN2 Haulage Limited.
He said he subscribed to Goods-In-Transit policy of the firm at N100 million every year, which is the value of goods in a 30-tonne truck, brokered by Property $ Pecuniary Insurance Brokers Limited, in 2016.
Ige added that every trip of the truck was valued at N5 million to make up for the annual premium of N100 million paid for the GIT, and that he was dutiful and also got bank alerts for the payments.
Goods-In-Transit insurance policy, according to the information obtained on the company’s site, covers loss of or damage to the goods insured (owned or for which you are legally responsible) caused by accident, theft, collision, overturning or fire while in transit by road, air, rail and inland motor ways.
Insurance cover commences immediately the goods are being loaded into the transit vehicle and lasts until the goods are unloaded at the final destination. The conveyance can be either by road, air or by rail, and the geographical limit is anywhere in Nigeria.
With this plan, Ige said he was delighted and confident he had secured his business’ future from any unforeseen circumstances.
He said he almost passed out in May 2017, when he was given the bad news that his truck, loaded with Honeywell flour had been stolen.
He, however, added that when he remembered that the goods were insured, he relaxed and reported the incident to his broker.
To his dismay, four months after the incident, all he got from his insurance broker were excuses from Consolidated Hallmark Insurance.
Ige said, “I am expecting a claim worth over N6 million because the goods stolen were 600 bags of Honeywell flour that were lifted from Apapa plant in Lagos. They were expected to deliver it to our customer in Port Harcourt, Rivers State, but it was diverted to Alaba in Lagos, from where it was later transferred to Birnin Kebbi.
“I have spent more than N2 million to track the trailer, yet no success. The insurance company has been giving me excuses. Meanwhile, Honeywell has started deducting the value of the goods from my account with the firm. I have paid over N2 million to the manufacturer now.”
According to him, all efforts to get the insurance company to hear his case had been unsuccessful as he was told by a member of staff of the insurance company that there was nothing the company could do. He was advised to locate the truck and sort himself out.
Philimex Multi Concept Limited, another haulage firm, is another victim of the alleged fraud at Consolidated Hallmark Insurance.
The Managing Director, Mr. Ayodele Aliu, said he had insured his company’s trucks against theft, fire incidence and accidents by subscribing to the GIT policy.
He said, “We insured goods in about 30 trucks with the company but three of them had issues four months ago. While two were stolen, one had an accident. Every effort made to reach the insurance firm to settle the claims proved abortive.
“The insurance broker had warned us about the intentional act of the firm to delay claim settlement but we insisted because another operator recommended the firm to us.
“As we speak, the claims are about N20 million and we have spent fortunes to track and settle debts since the unfortunate incident happened.”
At Anchor Insurance, allegations are also rife from the insuring public, who alleged that the firm fleeced them of their hard earned money as it refused to pay claims for their third party insurance in cases of accident.
One of the complainants, a bank manager in one of the Tier 2 commercial banks along Apapa Road, Lagos, who preferred anonymity, was allegedly deceived by the firm as it failed to settle the claims when his Toyota Camry, 2007 model, hit another vehicle on his way to work in March 2017.
According to him, the company had failed to settle the claim, worth N100,000, six months after the incident.
“We have been fleeced in this country by most of the insurance firms. Millions of Nigerians pay N5, 000 for third party insurance and more than one and half of them don’t make claims if their vehicles hit another, and a few of us that made requests were not paid.
“The companies make fortunes from the vehicle owners and still find it difficult to pay claims. It is quite unfortunate because I believe they are worse than commercial banks,” he alleged.
OPERATORS BATTLE ILLIQUIDITY
Investigations by The Point also revealed that the reported claims in the financial statements of 22 major leading insurance companies at the end of the first half of 2017 showed claims expenses to be at over N40 billion against N34.1 billion recorded in the corresponding period of 2016.
Though the claims payment is an indication that insurance firms have improved a little in their customer service and underwriting, it nonetheless appears that the insurers are not earning enough to match the growing claims’ liabilities.
The rising claims were coming against sluggish growth in premium income as Gross Premium recorded marginal increase from N109 billion by H1 2016 to N118.55billion by H1 2017. This means that while claims’ expenses rose by a significant 17.3 per cent, premium income grew at less momentum of 8.76 per cent.
For instance, Consolidated Hallmark Insurance managed to increase from N3.3 billion to N3.4 billion as gross premium written, while its claim expenses rose tremendously from N768.1 million to N1.9 billion within the period under review.
This means the company only witnessed a meager three per cent premium but its claims expenses grew by 151 per cent in H1 2017.
If this persists till the end of H2 2017, there are chances that more insurance firms would not be able to pay claims and more patrons would be disappointed beyond measures.
The Managing Director, Risk Analyst Insurance Brokers, Mrs. Funmi Babington-Ashaye, explained that lack of liquidity discouraged people from taking insurance cover.
“Other negative developments, which impacted on the industry include the decline in government revenue as a result of continued fall in oil price, a development which effectively returned the governments to its former position as the highest debtor to the insurance industry,”
she said.
A former President, Nigerian Council of Registered Insurance Brokers, Chief Babajide Olatunde-Agbeja, described claim processing as the major challenge in the industry.
“What most insurance companies do not understand is that one satisfied customer is better than spending fortunes to advertise your company in the media. Claim processing can be simplified because people that trust you with their premium want their claims to be paid as soon as possible.
“They do not want to hear stories or excuses from you and a lot of insurance firms are used to telling stories on the reasons the claims cannot be paid early. Once there is a claim, the firms should find out if there are no traces of fraud and once that is confirmed, claims should be settled immediately,” he
said.
In the case of delayed claim settlement in Consolidated Hallmark Insurance, Manager, Property and Pecuniary Insurance brokers Limited, Ms. Ugonma Ihekwoaba, explained that her company had been having unpalatable experiences with Consolidated Hallmark Insurance over unnecessary delay of claim
payment.
She said, “We were shocked when the insurance firm wrote us that it could not pay the claim because it was not the client’s driver that drove the truck that carried the goods; that it was a hired driver.
“That is not part of our initial agreement. We have cancelled all our transactions with Consolidated Hallmark because it is becoming an embarrassment for us.”
