In what could be termed as an unprecedented case in the insurance sector in Liberia, the Activa International Insurance Company (Lib) Limited has paid a whopping US$121,000 in claims to the National Contracting Company Limited (NCCL) for goods damaged while in transit from Harrisburg a few months ago.
NCCL, an Indian company that has been sub-contracted to procure transformers for the Mount Coffee Hydro Plant in Harrisburg had an accident while en-route to Harrisburg. ACTIVA Chief Executive Officer (CEO), Atty Saye Gbalazeh, presented the check to NCCL’s Commercial Officer Vivekanandan Ramaunaan at ACTIVA’s headquarters in Sinkor.
The container that was transporting the transformers from the Freeport to the construction site in Harrisburg was clipped by the railroad overpass/bridge known as the Bong Mines Bridge on the Bushrod Island.
According to Atty Gbalazeh, the container fell and all the transformers—30 pieces costing a total of US$168,000—a very huge amount of which ACTIVA has paid – got damaged. “They couldn’t salvage anything. So it was so good they bought insurance from us so we went there and did our assessment and that’s how we came out with this determination,” he said.
However, there is huge skepticism about insuring in Liberia as many Liberian are hesitant to get involved. Gbalazeh knows that there might just be several reasons for Liberians’ perception that is leading them to hold back from taking full take advantage of insurance services being on offer by the mushrooming insurance companies—insurance companies don’t respond when they are called upon to pay claims is at the center of these skepticisms.
The ACTIVA CEO said with the full payment of this claim and many other claims paid before, his company is setting a precedent that is endeavoring to erase the strong and entrenched perception among Liberians that it is a waste of time and money to buy insurance because they don’t get their money back when they need it most— one major problem being insurers failing to meet up with their obligations when claims are demanded.
Many also believed some companies’ failure to pay claims is making it difficult for the sector to get grounded and yet to be appreciated in the country. “It is this notion that we at ACTIVA are trying to get away with. We want to set the new and best way of doing things in this sector and prompt response to our customers’ problems is just one of these measures that we are putting into place to ensure effectiveness.”
Africa is one of the regions that have the lowest market penetration rate globally in the insurance business. The continent stands at just five percent and unfortunately, Liberia, though considered a virgin market for insurance, falls a little below this rating with four percent.
The sector is struggling in Liberia because of the huge skepticism, which he said shouldn’t be the case. “In everything there are some good and bad ones. There are so many good insurance companies in Liberia,” he said.
Gbalazeh, an accomplished insurance professional who worked in Corporate America for over 23 years with One Beacon Professional Insurance Company—a leading professional liability insurance company in Connecticut – noted other reasons the sector is being held back are lack of innovation on the part of insurance companies and the lack of proper understanding as to how the sector works globally.
While urging Liberians to take advantage of insurance services, Gbalazeh said, “One good thing about insurance is that the premiums never equal claims as we can see from this case. The premium NCCL paid was just US$12,000, but we are talking US$168,000 in damage here. So you see the exchange is not even close.”
Insurance companies, he said, are not money doublers. “We don’t have machines here to make money, but we are talking about market penetration which has to do with large number of people buying insurance. The more people that will come to buy insurance the better it will be for all of us,” he said, adding, “This is because there will be a bigger pool where that honest company pay its claims from. We all know that US$12,000 can’t replace US$121,000 but because we have a bigger pool we can underwrite this claim.”
The poll he’s referencing is the sum of all of the premiums that are being paid by the customers who are buying insurance. He noted that others have notions that nothing happens when they paid all these premiums.
“At times it is true, but something happened to the next person so we take some of this money to underwrite the cost of the damage. It is the next person today, but may be you tomorrow,” he said.
“So it is this poll of money that we manage well—investing some, paying claims with some and carrying out our administrative functions. This is why we are calling on Liberians to take advantage of the sector.”
NCCL’s Commercial Officer Ramaunaan lauded ACTIVA for living up to its promise. “We want to be grateful to you for standing by us. This is a good sign of customers’ relationship.” He said NCCL is now going back to see how they can reinforce their work to ensure that the company meets up with the deadline of the hydro’s dedication in December.
Meanwhile, ACTIVA boost of good record of paying claims to the insured. He said from January to July 30 of this year ACTIVA has paid US$719,723.94 in claims in various categories. These include motor vehicle owned and managed insurance, motor vehicle third party, and life and medical insurance.
During the six months period, Gbalazeh said US$75,930 was paid in motor vehicle owned and managed insurance; US$33,705 on motor vehicle third party and US$439,087.27 on life and medical insurance, he said.