Demand for insurance cover on kidnapping, terrorism, cybercrime, ransom payment is on the rise in the country.
Despite the Terrorism (Prevention and Prohibition) Bill, 2022, which prohibits the payment of ransom to abductors, kidnappers and terrorists for the release of any person who has been confined passed into law by President Muhammadu Buhari in May, this year, the crime has continued with ransoms paid.
The rise in insurance demand coincides with Nigerians getting more insecure as a result of the inability of security agencies to tackle the crimes.
There are, however, fears that the provision of this cover will further encourage criminal elements in the country to commit more crimes.
Besides, experts are worried. That is why they caution that insurance operators be weary in the provision of insurance cover for these crimes to avert burning their fingers when claims arise.
The Managing Director, Universal Insurance Plc, Mr. Ben Ujoatuonu, said terrorism, kidnapping, cybercrime, ransom payment has become a big risk, resulting to people asking for insurance to protect themselves.
He stated that insurers need to look at the insurance deeply to be sure that it is a risk they want go into because of the frequency, exposure and severities that are very high.
He pointed out that every society tries to put measures in place to ensure that its laws are obeyed, but observes that despite this, there are still some people that are determined to break the laws.
He said one of the responsibilities of the government is to protect lives and properties and in doing this, create enabling environment for businesses to thrive.
He said: “What this also does is that it reduces the elements of crime and criminality within the economy. But if you look at our system, you will see that overtime, we have been experiencing a kind of collapse in our security apparatus.
“So, since everybody is on his or her own. There is nothing people can do than to solve the problem by themselves and that is abiding by the issue of the ransom, which has made the criminal act become a very lucrative business. But be it as it may, it has become a big risk and if people are asking for insurance to protect them against such risk, it is not out of place.
“It is a very serious issue and I think insurance companies really need to look at it deeply to be sure that it is a risk we want go into because of the frequency, exposure and severity that are very high. We really need to be sure that we build enough statistics to work around the risk. It is quite a challenging situation because what we have in our clime is different from what is happening in other climes. Yes, we have acts of terrorism but the issue of kidnapping, ransom and organ harvesting has gone beyond terrorism act.
“If you move from Enugu to Port Harcourt, the road is not safe. It’s the same with Abuja to Kaduna, Ijebu-Ode to Benin, Lagos Ibadan Expressway and many more around the country. For me as an insurance person, I am going to be very careful because the certainty of those risk occurring is likely 95 per cent,” he noted.
Chief Underwriting Officer, Allianz Nigeria, Samuel Ogunnusi affirmed that kidnap insurance is trending.
He said his company was trying to provide the policy, but that they were yet to get approval of the National Insurance Commission (NAICOM).
“Yes, there are demands for kidnap insurance product. Some of our multinational companies in Nigeria are demanding it, but it is not ready. Until we get approval, we will not able to provide it.
“Kidnapping is happening in cyber too. We have situations where somebody will hack your system, kidnap it and demand for ransom.”
He further said the provision of the policy might not encourage the crime because the policy is treated as confidential, noting that it will not be known that company A and B has the cover.
