The payment of insurance claims to the
relatives of the victims of Dana plane crash in Lagos on June 3, 2012 has not
progressed as swiftly as expected. NIKE POPOOLA writes on the
journey so far and why the foreign reinsurers are finding it difficult to pay
up
Five months after a Dana Air plane crashed in
Lagos and left 153 passengers and crew members dead, the airline’s insurers
have paid $2.37m (N373.04m) claims to relatives of the deceased.
The Managing Director, Prestige Assurance, Mr.
Anand Mittal, disclosed this to our correspondent in Lagos on Friday.
Prestige Assurance led six other local insurance
firms to insure 30 per cent of the airline’s risk locally, while the remaining
70 per cent was reinsured abroad. The coinsurers are Nem Insurance Plc, Aiico
Insurance Plc, Continental Reinsurance Plc, Leadway Assurance Company Limited,
Sterling Assurance Limited and Standard Alliance Insurance.
“We have paid $30,000, which is about 30 per cent
of the total claims of each of the 79 applicants, who have completed their
documentation so far. No other relatives have submitted their completed
documents,” Mittal said,
He said the aircraft’s foreign reinsurers had
demanded for some documents to enable them commence the settlement of their own
part of the claims.
According to him, the relatives are required to
present letters of administration of the estate of the deceased and death
certificates, which none of them have been able to get so far.
He said relatives of those who died on the ground
and those who lost their properties to the crash, would also be compensated.
He, however, said they had not yet been paid because the amount due to each of
them had not been ascertained.
“The parties are dealing with that; when they
finalise on the amount, we will pay them. We do not know how much that is going
to be for now because that is being done by their solicitors,” Mittal said,
The Deputy Director, Administration and Policy,
National Insurance Commission, Mr. Leo Akah, had said the local underwriters
had commenced the payment of about 30 per cent of what the relatives of the
victims were entitled to.
He, however, said the foreign reinsurers, who
took 70 per cent of the risk, had not commenced payment because the relatives
of the victims were yet to produce the needed documents.
According to him, the foreign reinsurers are
requesting for death certificates and letters of administration, which the
relatives have not been able to produce.
Though the process of getting a letter of
administration might be cumbersome, Akah said it was not an insurmountable
challenge.
“The relatives are supposed to be paid an initial
payment within the first 30 days, but again, there are issues; we have to
identify the rightful beneficiaries; right now, there are multiple claimants
showing up,” he said.
The NAICOM official, who said different people
had been coming forward as relatives of the victims, added that this had slowed
down the pace of payment.
According to him, the relatives of each victim
are entitled to $100,000 each, which is the internationally acceptable
standard.
Akah said the balance of $70,000 would be paid
after the presentation of the death certificate and letter of administration.
The African Insurance Brokers Association, a body
of the African insurance organisations, however, said the crash of the Dana
aircraft might lower the position of the continent’s aviation insurance sector
in terms of global rating.
“The position of the African aviation insurance
sector to the global market may dip further in the current year, following the
volume of claims that will be coming from the recent crash in Lagos of the Dana
aircraft that caused the death of many people,” the association stated.
AIBA said analysis had indicated low level of
risk management practice across different sectors in the African business
environment if the comments of technical error from the Dana crash were
anything to go by.
According to AIBA, Africa has less than 10 per
cent of the world’s civil aviation traffic, but with over 40 per cent of the
total accident rate, which makes it to be completely disproportionate to the
amount of flights.
The association had highlighted the issues of
aircraft in the region operating with ill-trained crews in poorly regulated
environment.
AIBA noted that in 2011, aviation claims from
Africa stood at about $65m due to the crash of two Congo Democratic’s civilian
planes, leading to the death of 109 people; and Moroccan Hercules Air Force
plane, Dolon, which caused the death of 80 people on board.
According to AIBA, in 2011, the global industry
had the lowest aviation claims since1995, despite the fact that the loss
figures stood at $1.13m, from $2.09m in 2010.
It said that the African aviation insurance
pool’s premium dropped by 32.4 per cent from $5.8m in 2010 to $3.9m in 2011.
Despite the drop in premium, AIBA said the pool
recorded $824,720 in 2011, from a lower record in 2010.
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