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CLAIMS SETTLEMENT EFFICIENCY AND CONSUMER TRUST IN DRIVING ECONOMIC PARTICIPATION: A CASE STUDY OF AXA MANSARD INSURANCE PLC
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
The insurance sector in Nigeria has historically been plagued by low penetration rates and a profound lack of consumer confidence, despite its potential to drive economic participation and financial inclusion. As of November 2025, insurance penetration stands at a meager 0.5% of GDP, far below the global average of 6.8% and the sub-Saharan African benchmark of 2.9% (Nigerian Insurers Association, 2025; Swiss Re Sigma, 2025). This dismal figure reflects not only affordability challenges but also deep-seated mistrust among potential policyholders, who often view insurers as unreliable due to protracted claims processes and inconsistent payouts. Claims settlement efficiency measured by timeliness, transparency, and fairness serves as the linchpin for building trust, directly influencing consumer willingness to engage with insurance products and, by extension, their broader economic participation through risk mitigation and capital formation (Punch, 2025a). In a nation where over 133 million people live below the poverty line and informal economies dominate, efficient claims handling can transform insurance from a peripheral service into a catalyst for savings, investment, and entrepreneurial activity (World Bank, 2025).
The Nigerian Insurance Industry Reform Act (NIIRA) 2025, assented to by President Bola Ahmed Tinubu on August 5, 2025, represents a seismic shift aimed at rectifying these deficiencies (State House, Abuja, 2025). By consolidating outdated legislation like the Insurance Act of 2003, NIIRA introduces stringent claims settlement timelines capping processing at 60 days with penalties including monthly compound interest for delays and establishes a Policyholder Protection Fund financed by 0.25% of gross life premiums to safeguard consumers during insurer insolvency (Mondaq, 2025a; NAICOM, 2025a). These reforms are projected to elevate gross written premiums to ₦1.21 trillion in Q2 2025, a 49.3% increase year-on-year, with life assurance contributing significantly through enhanced group policies (NAICOM, 2025b). For consumers, who cite delayed claims as the primary trust barrier in 62% of surveys, NIIRA’s zero-tolerance stance could foster a 20-30% uptick in uptake, thereby channeling more household savings into productive economic avenues like micro-enterprises and education funding (BusinessDay, 2025; Tribune Online, 2025a).
AXA Mansard Insurance Plc, a composite insurer and member of the global AXA Group, exemplifies the transformative potential of these reforms. Founded in 1989 and listed on the Nigerian Exchange Group (NGX) since 2011, AXA Mansard reported ₦120.53 billion in insurance revenues for Q3 2025, a 23% year-on-year rise, with gross written premiums climbing 24% to ₦143.48 billion (Nairametrics, 2025a; ThisDayLive, 2025). The company’s claims settlement prowess is notable: in 2024, it disbursed ₦117 billion in payouts with an average processing time of 45 days below the industry average of 90 days bolstering its B+ Financial Strength Rating from AM Best (AM Best, 2025; AXA Mansard, 2025a). Life and savings products, including group life and annuities, grew 15% to ₦21.83 billion in Q3 2025, driven by NIIRA-mandated employer covers, which now require at least three times annual emoluments per employee (Punch, 2025b; Mondaq, 2025b).
Efficient claims settlement at AXA Mansard not only rebuilds trust evidenced by a 38% surge in health-linked policies to ₦57.60 billion in Q3 2025 but also spurs economic participation by enabling quicker fund recycling into investments and consumption (Nairametrics, 2025a; ThisDayLive, 2025). Pre-NIIRA, consumer distrust stemmed from 60-day delays and 25% denial rates, deterring 70% of potential buyers (Tribune Online, 2025b; LawPavilion Blog, 2025). Post-reform, AXA Mansard’s digital platforms AI chatbots and blockchain verification have reduced settlement to 24-48 hours for 80% of claims, fostering repeat business and referrals that amplify economic ripple effects like SME lending backed by assured covers (AXA Mansard, 2025b; Finance in Africa, 2025).
In a $500 billion economy targeting $1 trillion by 2030, NIIRA’s emphasis on claims efficiency via penalties and protection funds positions insurers like AXA Mansard to drive participation, with Q2 2025 life premiums at ₦397 billion signaling 49.3% growth (NAICOM, 2025b; BusinessDay, 2025). This study dissects AXA Mansard’s model, linking settlement speed to trust metrics and economic outcomes.
1.2 Statement of the Problem
Claims settlement inefficiencies in Nigeria’s insurance sector averaging 90 days with 25% denial rates erode consumer trust, confining penetration to 0.5% and stifling economic participation, as 70% of potential buyers cite payout fears (Tribune Online, 2025b; LawPavilion Blog, 2025). For AXA Mansard, despite ₦120.53 billion Q3 2025 revenues (23% up), legacy delays in group life claims (45 days average) contribute to 15% churn, limiting fund recycling into investments amid 34.2% inflation (Nairametrics, 2025a; National Bureau of Statistics, 2025; ThisDayLive, 2025).
NIIRA 2025’s 60-day cap and protection fund (0.25% life premiums) aim to remedy this, yet enforcement gaps fines up to ₦100 million notwithstanding persist, with 62% consumers distrusting due to past failures, hindering 49.3% premium growth’s economic multiplier (Mondaq, 2025a; Punch, 2025a; NAICOM, 2025a). AXA Mansard’s 38% health surge masks life assurance vulnerabilities, where delayed settlements deter SME adoption, capping participation in a $1 trillion economy (Finance in Africa, 2025; BusinessDay, 2025).
1.3 Objective of the Study
General Objective: To explore how claims settlement efficiency and consumer trust at AXA Mansard Insurance Plc drive economic participation.
Specific Objectives:
- To assess claims settlement processes and their efficiency metrics.
- To evaluate consumer trust levels and influencing factors.
- To analyze the linkage between efficiency, trust, and economic participation.
1.4 Significance of the Study
This research equips NAICOM and AXA Mansard with efficiency benchmarks (45-day average, 80% digital), projecting 20% trust uplift and ₦120.53 billion revenue sustainability, aligning NIIRA’s 60-day cap with 49.3% growth (NAICOM, 2025a; Nairametrics, 2025a; Punch, 2025a).
It enriches trust models in emerging markets, bridging 2025 reform gaps for Lagos Business School studies and forecasting 0.5% penetration rise (Mondaq, 2025b; Swiss Re Sigma, 2025).
For AXA Mansard’s 1 million clients, it advocates blockchain claims (24-48 hours), reducing 15% churn and enabling SME lending, boosting economic resilience (ThisDayLive, 2025; Finance in Africa, 2025).
1.5 Research Questions
- What are the key features and efficiency levels of claims settlement at AXA Mansard?
- How does consumer trust manifest and what factors shape it?
- In what ways do settlement efficiency and trust promote economic participation?
1.6 Hypothesis
H1: Claims settlement efficiency has no significant effect on consumer trust at AXA Mansard.
H2: Consumer trust shows no substantial influence on economic participation.
H3: The interplay of efficiency and trust yields no measurable economic outcomes.
1.7 Scope of the Study
Focused on AXA Mansard’s claims and trust dynamics (2024-2025), via surveys (n=300), records, and interviews. Covers life/non-life; excludes competitors or pre-NIIRA, Lagos-centric.
1.8 Definition of Terms
- Claims Settlement Efficiency: Timeliness and fairness in payouts.
- Consumer Trust: Confidence in insurer reliability.
- Economic Participation: Policyholder engagement in savings/investments.
- AXA Mansard Insurance Plc: Leading composite insurer.
References
African Financials. (2025). AXA Mansard Insurance 2024 annual report. https://africanfinancials.com/document/ng-mansard-2024-ar-00/
AM Best. (2025). Affirmation of ratings for AXA Mansard Insurance. https://www.ambest.com/ratings/axa-mansard-2025
AXA Mansard. (2025a). Q3 2025 financial results. https://www.axamansard.com/investor-relations/q3-2025
AXA Mansard. (2025b). Digital platforms report 2025. https://www.axamansard.com/digital-report-2025
BusinessDay. (2025). NIIRA 2025 and compulsory insurance expansion. https://businessday.ng/insurance/article/niira-2025-compulsory-expansion/
Finance in Africa. (2025). What you need to know about Nigeria’s new insurance reform Act. https://financeinafrica.com/insights/nigeria-new-insurance-reform-act/
LawPavilion Blog. (2025). Key innovations of the Nigerian Insurance Industry Reform Act (NIIRA) 2025. https://lawpavilion.com/blog/key-innovations-of-the-nigerian-insurance-industry-reform-act-niira-2025/
Mondaq. (2025a). The Nigerian Insurance Industry Reform Act 2025: Key innovations and business implications. https://www.mondaq.com/nigeria/reinsurance/1704832/the-nigerian-insurance-industry-reform-act-2025-key-innovations-and-business-implications
Mondaq. (2025b). Nigeria’s Insurance Industry Reform Act, 2025: A deep dive into reform and its challenges. https://www.mondaq.com/nigeria/insurance-laws-and-products/1695476/nigerias-insurance-industry-reform-act-2025-a-deep-dive-into-reform-and-its-challenges
NAICOM. (2025a). Q2 2025 insurance market bulletin. https://naicom.gov.ng/q2-2025-bulletin
NAICOM. (2025b). Implementation guidelines for compulsory insurances under NIIRA. https://naicom.gov.ng/compulsory-guidelines-2025
Nairametrics. (2025a). AXA Mansard Q3 2025 results: 23% revenue growth. https://nairametrics.com/2025/11/05/axa-mansard-q3-2025-results/
National Bureau of Statistics. (2025). Inflation report October 2025. https://nigerianstat.gov.ng/inflation-oct-2025
Nigerian Insurers Association. (2025). 2024 industry performance report. https://nia.org.ng/reports/2024-performance
Punch. (2025a). NIIRA 2025: New dawn for Nigeria’s insurance sector. https://punchng.com/niira-2025-new-dawn-for-nigerias-insurance-sector/
Punch. (2025b). Recapitalisation: Expect a serial review going forward, FG tells insurers. https://punchng.com/recapitalisation-expect-a-serial-review-going-forward-fg-tells-insurers/
State House, Abuja. (2025). President Tinubu assents to Nigerian Insurance Industry Reform Bill 2025. https://statehouse.gov.ng/news/president-tinubu-assents-to-insurance-reform-bill-2025/
Swiss Re Sigma. (2025). World insurance in 2024: Emerging markets outlook. Sigma No. 3/2025. https://www.swissre.com/sigma/3-2025
ThisDayLive. (2025). AXA Mansard sustains growth momentum, lifts insurance revenues by 23% to ₦120.53 billion in Q3 2025. https://www.thisdaylive.com/2025/11/04/axa-mansard-sustains-growth-momentum-lifts-insurance-revenues-by-23-to-%E2%82%A6120-53-billion-in-q3-2025/
Tribune Online. (2025a). NCRIB projects 3% insurance penetration by 2027 on back of NIIRA reforms. https://tribuneonlineng.com/ncrib-projects-3-insurance-penetration-by-2027-on-back-of-niira-reforms/
Tribune Online. (2025b). Deepening insurance penetration in Nigeria. https://tribuneonlineng.com/deepening-insurance-penetration-in-nigeria-2/