Market fire outbreaks force traders to embrace insurance

The incessant fire outbreaks in markets across the country have driven more petty traders to take up fire insurance covers.

The Managing Director, Niger Insurance Plc, Mr. Kola Adedeji, said there had been an increase in premium collected and claims paid as a result of market fire incidents.

He attributed the rise to the awareness among shop owners and petty traders that they could get substantial compensation if they suffered losses.

“People are seeing the need now to have that kind of financial protection, most of the small traders in the central markets now have fire insurance cover for their shops.  Sometimes, the premium they pay is as low as N16,000 per annum and we pay compensation to them in millions,” Adedeji said.

Many big markets have been shut down over the years as a result of fire incidents, which have exposed the poor safety measures and inefficient fire fighting capability in the country.

During a visit to the Ketu Market, which was recently razed by fire, the Lagos State Governor, Mr. Babatunde Fashola, urged the traders to minimise future losses by taking appropriate insurance covers.

The Jankara, Ketu and Alade markets, all in Lagos, experienced fire outbreaks in December 2012, March and April this year, respectively.

The refusal of the government to compensate them for their losses is making the traders and shop owners to seek protection from insurance companies, according to underwriters.

Investigations revealed that in recent years, claims on fire insurance policies had been at the top in 10 different classes of non-life policies of many underwriting firms.

The Managing Director, AIICO Insurance Plc, Mr. David Sobanjo, said out of the total claims of N3.16bn paid on non-life policies by the company between January 2010 and December 2011, fire alone accounted for N657m.

According to him, the firm paid N6.3bn total claims on 10 different non-life policies in the 2012 financial period, with fire accounting for the highest portfolio of N950.7m.

The Managing Director, Sovereign Trust Insurance Plc, Mr. Wale Onaolapo, also said that in the second quarter of 2012, the firm paid N83.6m as fire claims out of the total N439.9m paid on different policies.

The Managing Director, Staco Insurance Plc, Mr. Sakiru Oyefeso, said the firm settled claims worth N1.3bn in the third quarter of 2012, with fire accounting for N272.04m.

The Managing Director, Royal Exchange General Insurance Company, Mr. Olutayo Borokini, said the firm paid N1.58bn as claims to clients at the end of the third quarter of 2012.

He disclosed that fire took the highest share of 39.9 per cent, amounting to N631m in the period under review.

Also, the Managing Director, Equity Assurance Plc, Mr. Ekpe Ukpbaio, stated that the firm paid N556m as total claims in the first eight months of the 2012 financial year, adding that fire took the highest with N242m of the total amount.