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Honouring Claims Obligation To Insurance Consumers

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Policyholders have, over the years, faulted the inability of some insurance companies to pay claims as and when due, leading to low patronage of the insurance industry. Insurance stakeholders, at the just concluded Almond Insurance Consumers Forum held in Ikeja, Lagos, at the weekend, charged underwriters to make prompt claims settlement a priority if they indeed want to increase insurance penetration in the country. ZAKA ABD-KHALIQ writes.

Of all the sectors in the financial service system of the economy, insurance industry seems to be the one enjoying the least patronage as its penetration and acceptance in Nigeria is still below one per cent.

The low penetration in the country is a serious cause for concern to experts, investors and market observers, as Nigerians continue to nurse negative perception about claims settlements by underwriting companies.

To this end, they believe insurers don’t pay claims, even though, claims volume seem to be increasing on a yearly basis.

Insurance consumers, however, charged underwriting outfits to honour their claims obligation as inability to do so has made insurance penetration below one per cent, despite a huge 160 million population of the country.

To them, the best form of publicity lies in paying claims as and when due, a development that will trigger a multiplier effect on insurance consumption, thereby, increasing insurance acceptance and penetration that will only bring good news to industry players.

INSURANCE CONSUMERS’ COMPLAINTS

Insurance consumers, at the event, generally complained of inability of insurance companies to pay claims as claims are either not paid or delayed.

Most of them also said the terms and conditions were not adequately spelt out at the point of buying a policy, noting that, they were only made aware of what the policy did not cover at the point of getting claims. These bad experiences, they said, have made them and their colleagues have reservations for insurance as a product.

They urged insurance companies to consistently pay claims if they want them to buy insurance, adding that, this is the best form of advert they can do. Anybody who gets claims will persuade his friends to join and that is how the information will spread, they said.

Insurance market, according to them, must take their time to explain the terms and conditions of each policy to policyholders at the point of buying the cover to avoid conflicts at the point of paying a claim.

INSURERS’ REACTIONS

On his part, the managing director/CEO, FBN General Insurance Company, Mr. Bode Opadokun, said there are various insurance covers in the market that can address the needs of the consumers, although, he called for increased awareness on these products for increased patronage.

“There are different insurance products across the country that meets the needs and yearnings of the people. We have Loss of Employment product, Shop owners insurance, building insurance and there is also the latest product which is the fusion of comprehensive and third party insurance cover, among others. Most of these products arise from the feedback we get from our customers and the need to create products that fit into the socio-economic scenario of the country,” he stressed.

While urging Nigerians to approach insurers with their respective risks, he assured them that insurance operators are ever ready to tailor a product towards their needs.

Believing there is the need for insurers to explain in details the terms and conditions of each product to aspiring policyholders before selling to them, this, he said, is essential to avoid conflict at the point of lodging a claim, saying, the insured must be aware of what risks his policy cover and what it does not.

He charged policyholders to always approach their insurers on time and submit the necessary documents to process their claims when an insured risk occurs, noting that most times, the delay in the payment of claims was because customers fail to submit the needed documents on time. “When you don’t submit the documents on time, it will prolong the duration for settling a claim and people will accuse us of delaying claims whereas it comes from them,” he stated.

The Executive Secretary, Nigerian Council of Registered Insurance Brokers (NCRIB), Mr. Fatai  Adegbenro, charged the citizenry to adopt insurance as it is key to survival. “When there is a disaster, government can only pay you token but with insurance, you will get near or exactly what you have lost. Everybody needs it because of the daily risk we are exposed to,” he pointed out.

Similarly, the managing director/CEO, Guinea Insurance PLC, Mr. Tunde Oshadiya, said Insurers must let people know the benefits of insurance policies they are carrying, stressing that Insurance of public building is compulsory by law. Tenants, he said, should make it a priority to ensure that the house they want to rent is insured by their landlords.

According to him, “One of the cheapest thing you can buy is insurance. For instance, you can insure a N10 million house with N25,000 premium. Most policyholders did not know that the Fire Insurance policy they have covers Flood, or when wind blow-off your rooftop. All these need to be explained to policyholders by marketers to ensure that customers maximize their cover.”

To settle a claim, he said, it should not take more than five days maximum , but that when a claimant failed to submit the required documents on time, it will prolong the claims payment period.

“Delayed documentation on the part of policyholders is a challenge to timely claims payment. Claims should not take more than 5 days and there are underwriters paying within that timeframe. But when death is involved, you find it difficult to get police report on time, thereby, delaying the claim process. Moreover, some customers do report late, or fail to provide the documents required of them by their insurers on time,”  he pointed out.

The managing director/CEO, Blue Pearl Konsult Limited, Chief Chris Obi, on his part, said, Insurance business can only thrive in situations of trust that insurers will not renege on their promises to the insured, adding that, over time, the insuring public have experienced abuses and infractions on their insurance claims and confidence level has waned.

Moreover, he said, Insurance laws has been stagnant for too long that both insurers and the insured do not feel fully protected. Even the available laws are poorly enforced, so that there are no consequences for breaking insurance laws, especially by insurers, he stressed.

To him, lack of faith and confidence have seriously eroded the trust that must exist between insurers and customers and only a change in the insurance paradigm  and offer of a rebranding of insurance can flip the situation.

Obi, who was the Keynote Speaker at the event, informed insurers that listening to customer complaints are free opportunities for improvement, higher sales and profitability.

While available research claim a whopping 96 per cent of customers will not bother to give feedback, he said, unfortunately, most businesses, especially, underwriting firms  do not pay adequate attention to the remaining four per cent, who give their feedback.

“Therefore, in Insurance industry, without listening to feedback from your customers, exceptional service may be far away just as you are not cognisant of customer pain points. Listening to the customer is perhaps the most important part of design and strategy to deliver exceptional service and be successful,” he stressed.

Top level product planning, he pointed out, must ensure insurance products are relevant, affordable and value adding for the ultimate customer, while all employees must have a fair knowledge of the company’s products in line with the purpose and vision set and shared by top management.

NAICOM STANDPOINT

The Deputy Commissioner for Insurance, Mr. Sunday Thomas, said the National Insurance Commission(NAICOM), as a regulator of the insurance industry, has always make it a duty to only approve products that meet the needs of the market.

“Our product approval process ensures that only products that are fit for consumption get to the market. So, any product that cannot serve the needs of the public will not be approved and when a product is in the market that fail to serve its purpose, we will withdraw it,” he vowed.

While addressing insurance consumers, he disclosed that there are several complaint bureau that customers can express their grievances about insurance and that their problems would be attended to. He urged the people to explore NAICOM and the Nigerian Insurers Association(NIA) Compliant Bureaus, promising that their cases would be pursued to logical conclusion. Through NAICOM complaint bureau, a lot of claims have been settled without necessarily seeking redress in court, he said.

THE WAY FORWARD

By observation, Chris Obi said, customer pain points don’t appear formidable in Nigeria with an incredibly low level of insurance penetration at 0.35 per cent aside 15.3 per cent for a comparable economy like South Africa. Should the Nigerian figure rise dramatically, he said, customer pain points will expectedly rise in tandem.

He, therefore, advised insurance companies to look out for and remove pain points as rate of insurance penetration rises, even as one may not justly classify the level of pain points in Nigeria as bottom level, in an environment of paucity of data.

If we have adequate insurance penetration and a well-documented customer service data, invariably, opportunities arise for growth of nation, company and customers, he stressed.

Chief Obi charged insurance business in Nigeria to be upgraded to accommodate the highest standard of Quality Assurance, on the road to certification to respective quality and professional titles from International Standards Organisation (ISO).



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