Customer satisfaction is at the heart of every successful business and insurance business is not an exemption. However, insurance industry is lagging behind in giving quality services to its teeming customers, a trend that insurance consumers have urged insurers to change for good. ZAKA KHALIQ writes.
Severally, insurance industry have been accused of poor customer relations and service delivery. On many occasions, insurance consumers have identified slow response of insurance operators to payment or non-payment of claims, lack of innovative products, slow response to complaints, among others.
And at a time the industry is planning to deepen penetration, the insured said all the aforementioned anomalies must be corrected to persuade more Nigerians to subscribe to insurance products and services.
At the First Interactive Session with major consumers of insurance products and services organised by the National Insurance Commission (NAICOM) in Lagos at the weekend, insurance consumers and relevant stakeholders charged underwriting firms to improve their service delivery, launch innovative and problem-solving products, leverage on technology to deepen insurance penetration, prompt payment of claims and so on.
The president/chief executive, Dangote Group, Alhaji Aliko Dangote regretted that most insurance operators do not provide relevant solution to the needs of the sector’s they play in because they lack the full understanding of the nature of these businesses, adding that, insurers are very slow in responding to emerging trends such as cyber exposures, agric. Insurance, among others.
Stating that most Nigerian are unable to cover risks across other African Countries, by issuing Pan African Policies, he noted that most Nigerian insurance policies are not replicated in other African countries, calling for a change in this area.
Dangote, who was represented by the group chief risk & insurance officer/group chief procurement officer Dangote Industries Limited, Dr. (Ms) Adenike Fajemirokun, urged underwriters to be prompt in claims payment, as delay may impaired or ruin the business.
Reacting to the recent circular sent by the National Insurance Commission (NAICOM) to all operators demanding to abide with the specified uniform ratings on compulsory insurances, he stressed that consumers want the widest coverage at the most competitive price with the best security, adding that ‘where there are divergent prices among highly regards insurers, consumers will go for the most competitive price.
Charging insurers to invest more in risk engineering and survey capacity, Dangote added that the implementation of local content policy, calls for exhaustion of local capacity allowing for participation of weak insurers in Special and Large Risks , whilst it exposes business to claims default and delay.
“There is the need for insurers to develop other channels of distribution so as to deepen insurance penetration beyond the already insured two million Nigerians, while insurers must also collaborate with NAICOM for achievement of transformation agenda. Insurers must be more proactive in studying the operations of consumers and fashion out generic risk solution models,’’ he pointed out.
Corp Marshal, Federal Road Safety Corps(FRSC), Mr. Boboye Oyeyemi, said with technology, consumers can more easily find what they want, compare it with other items, get recommendations from friends, family, and colleagues, buy from wherever they’re located, and tell each other about the experience afterward.
In response to this dramatic change, he said, many companies have successfully transformed their business models to stay relevant to their customer saying, many insurance companies continue to rely on the traditional business model of selling large numbers of products designed for mass markets through agents and brokers.
From an insurer’s point of view, he said, establishing personal relationships with customers happens only when a claim is made, while to consumers, insurance is seen as a commodity.
“Beyond a certain point, there is little differentiation between core insurance products and providers. In this environment, consumers often choose their insurance products based solely on price,” he stressed.
Proffering solutions to the challenges of insurance industry, he said, fake insurance companies must be completely eliminated, while the regulatory and supervisory agencies must ensure proper enforcement
The registered insurance companies, according to him, should also endeavour to settle claims promptly so as to motivate the consumers into also paying their premium promptly.
If insurance is both well designed and implemented, he said, it can have an enormous impact for improving road safety.
Given this strong alignment, there is an opportunity for the insurance industry to take a leadership role in furthering the cause of safer roads, especially as it stands the risk of compensation in event of crashes, he pointed out.
Earlier, the Commissioner for Insurance, Alhaji Mohammed Kari, said, his commission had signalled the issue of effective and efficient service delivery to consumers as a key priority with its establishment of Complaint Bureau Unit to deal with complains from members of the public against any insurance operator.
This unit, he stressed, had recently been upgraded and it’s now headed by a Deputy Director to attend to aggrieved consumers. Many aggrieved consumers have continued to access this desk to register their complains with us, he said. He advised aggrieved customers to take advantage of this desk and report their challenges to NAICOM through this help desk, promising that their complaints would be attended to.
Addressing operators, he said: “the difference between great and poor customer service has always been clear, and businesses on the wrong end of this spectrum usually pay a price. This is as true for insurance as it is for any other customer-facing business. Today, the consequences of subpar service are amplified by the speed and reach of social media.
“One poorly handled claim, one mistake captured on a smart phone could escalate quickly into a brand-damaging crisis. This is why we believe it has become imperative that insurance firms increased their focus on providing great customer experience.”
The competitive environment and the changes in the world economy as a result of globalisation, deregulation, privatisation, financial meltdown, and the modern advancement in technology, according to him, gives insurers the opportunity to transform their business operations and realigned with customers by understanding the needs of the consumers and ensuring an enhanced and efficient delivery of products and services. ‘We are aware that the satisfaction of consumers of product and services plays a vital role in the sustenance of any business,’ he stressed.
Although, he said, there are situations where the insured in connivance with insurance Brokers allot proportion of risk to local underwriters without due cognisance of the insurers’ capacity; preferring to place risk abroad even when the local market is not saturated, he added that some consumers also in alliance with intermediaries chose to exclude some underwriters from participation in underwriting certain risks without cogent tenable justification.
The commission, he stated, frowns at these practices and want to use this medium to inform such consumers to desist from the practices as they run counter to our regulations. “Where we have noticed such practices, we have rejected applications from operators for approval to cede such risks abroad. This action of the consumer/broker sometime leads to delays in placement of the risk even when the insured has paid its premium to the intermediary,” he pointed out.
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