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By Henry Uche
As operators, intermediaries and other stakeholders in the insurance value chain continue to lament poor patronage of the sector by Nigerians, experts have called for more patronage to enable the industry to compete with its peers in other countries. This is evidenced by its position in the African continent and globally as well as its low contribution to Nigeria’s Gross Domestic Product (GDP), persistent low penetration, and negative public perception.
Many have cited the various incidences involving outright denial or postponed claims settlement that have significantly eroded the faith, trust and confidence citizens have in the insurance sector. This pervasive mistrust they argue have been hindering the industry’s growth over the years hence the call for urgent measures to reestablish its credibility.
As the growing unease regarding the dependability of insurance companies and their commitment to fulfilling claims persists, experts in the sector have maintained that the task of making the sector grow and contribute significantly to the economy and beyond, rests on the shoulders of insurers.
A heartrending experience of where policyholders often time encounter hurdles while attempting to avail their rightful claims- , the heartbeat of insurance business has become a reccuring decimal in the industry’s debate. These incidents have not only resulted in financial distress for individuals and families but have also cast a shadow of doubt on the entire industry..
Consequently, many Nigerians have remained hesitant to investing in insurance, fearing that their claims might be met with skepticism or deliberate delays.
Acknowledging the weight of the ugly situation, industry leaders and regulators have been holding enlightenment programmes on the imperative of rebuilding trust and confidence through transparent practices and expeditious claims processing, which are major cornerstones to mend the fractured (fences) relationship between insurers and the insured.
Speaking at the 2023 Journalists Seminar put together by the National Insurance Commission (NAICOM), in Uyo, the Assistant Director, Complaint Bureau Life, NAICOM, Mrs. Augustina Onojake Steve, who delivered a paper on “Re- awaking Nigerian Insurance Industry through Claims Settlement” urged underwriters to walk the talk.
According to her, it is not enough to make promises to potential and prospective policyholders, but the committed in keeping the promises. “In Nigeria, the problem of insurance industry is bad image. This has for decades stood as bane of the industry’s growth. The bad image of the industry dates back to early 19th century when Nigerians took over insurance business from the early British managers.
The way and manner the then Nigerian managers carried out insurance business transactions especially in the area of claims payment made the public to see insurance as a scam. Since claims payment is the end product of insurance service, when the insured pays the premium, he/she expects nothing less than indemnity at the critical time. Ability to pay claims is the real test of a solvent insurance company.
“The quality of claims administration can make or mar an insurance company. All genuine claims must be paid promptly. The image problem which the insurance industry has today is because of poor claims handling procedures.”
“Prompt Claims payment drives Policy holder’s loyalty, boasts Policy holder’s acquisition and recurring revenue of insurance company, publicizes the company, by implication attract more customers, and Improves Trust and promotes Insurance market share and development”
To her, customers’ satisfaction and experience is another factor that points towards insurers, either meeting policyholders’ expectations or underperforming. Though claims may be paid at the end, she said, however the feelings (experience) they – policyholders had in the process goes a long way to speak in favour or otherwise of the insurance company. Thus, customers’ experience and satisfaction must be handled conscientiously.
“Experience has shown that some policyholders were dissatisfied by the way and manner they are treated by the insurers when loss occurs. Customers frown when insurance companies request for too much evidence and documentations to prove a loss. Some claims are not settled because the insurer refuses to admit liability.
“However when claims are settled, they are not paid in full; some claims are rejected purely on technical grounds, while some claims are unduly delayed and in most cases- insurer argues that the claims are fraudulent.”
Onojake Steve who admitted that policyholders most often than not fail in their part to keep to the terms and conditions (T&Cs) of the contract, charged underwriters to ensure that prospective policyholders clearly understand every provisions and obligations spelt out in the contractual engagement -word to word, letter to letter, hence the need to ascertain that the intending policyholder is ‘Fit and Proper’ to engage an insurer.
“Ideally, a prudent claims settlement promotes customer contentment and allegiance. In order to re-awaken the industry through claims settlement, insurance companies should beef up claims reserve to cater for claims settlement when loss occurs.
“Lack of trust and confidence in the Nigerian insurance industry resulting from non-settlement of claims constitute one of the biggest challenges of the industry. Non settlement of claims have negatively impacted confidence in the industry.
“Thus, insurance companies should endeavor to settle claims promptly because Claims payment in insurance contract serves as spice that attracts potential policyholders to insurance patronage” she urged.
Similarly, an insurance titan, Mr. Gus Wiggle who corroborated the above stance, noted that establishing a very clear and accessible channel for claims filing and processing, coupled with sincere communication about the process, is paramount to restoring confidence.
Moreover against speculations that insurance companies would ordinarily wish their policyholders do not call for claims, an insurance titan, Mr. Gus Wiggle disabused such minds saying, “Insurers do not pray or wish that policyholders would never experience the specific incidents for which they took cover and would never come for claims. In fact, insurers are in the business of providing coverage for policyholders and paying claims when they arise. However, insurers have a responsibility to their shareholders to manage risk and minimize losses.”
At the conference, it was made known to insurance correspondents that affordability of insurance products plays a pivotal role in this regard. More so, to attract a broader segment of the population, insurers must design plans that are accessible to various income groups; insurance options that cater to diverse needs can make insurance a practical choice for more Nigerians, thereby expanding the industry’s reach.
Regulators too can help by taking proactive stance in enforcing stringent standards and monitoring insurers’ compliance with claim settlements particularly. This proactive actions can help minimize cases of unjustified claim denial or unnecessary delays, thereby gradually reinstating trust.
Nigeria’s insurance industry is at a crossroads where it must confront every skepticism stemming from past claims disputes. By championing transparent practices, streamlining claims processing, and offering affordable plans. The sector can begin to rebuild its reputation by doing it says it would do, and doing it at the right time, right place and right manner. Industry stakeholders must continue to collaborate to address these concerns, by doing these, the prospect of increased penetration and a revived trust in insurance inches closer to realization.
