The need to boost confidence and reassure policyholders and general public of a new direction for insurance industry has compelled the regulator to parley with consumers. Sunday Ojeme reports.
For any business to remain genuinely sustained, consumers of products from such an investment must be recognised as integral part of the whole approach. It is for this reason that investors would do everything to retain their clients to remain steady and also record good profit.
Ultimately, the bottom line in all of this is confidence. Gaining and retaining the confidence of product consumers remains an arduous task. The moment clients lose confidence and trust in a particular item it becomes herculean to regain the assurance.
Overtime, the Nigerian insurance industry has suffered same situation where a huge number of individuals and corporate organisations lost confidence in the activities of the operators. The damning apathy is what the industry still suffers till date.
Today, even with the over 180 million population and widespread human and natural resources, insurance penetration in the country still hover between 0.2 and one or two per cent, depending on where the figure is coming from.
For an industry that should ordinarily be the pillar of other sectors, it contributes about 0.6 per cent to the nation’s gross domestic product.
To correct the anomalies, the regulator, National Insurance Commission (NAICOM), as well as the operators had been making concerted efforts to reform the sector through policy initiative at the top level of government and introduction of attractive products by the players.
Although the impact has been a bit noticeable, it is, however, not as brilliant as expected considering the fact that the percentage of the uninsured in respect of individuals and businesses still remains a far cry from the reality on ground.
Consumers as kings
This has spurred the need for the industry to readdress its relationship with existing policyholders as a way of regaining their confidence as well as using them as a platform to attract more clients into the fold.
To get this done, NAICOM again consolidated its rapport with insurance consumers recently where it assured them of the need to see the industry from a new perspective from the old order where policyholders battle with underwriters to get their claims paid, even after being verified as genuine.
Speaking to the consumers, the Acting Commissioner for Insurance, Mr. Sunday Thomas, described the meeting as one of the very rare moments where all stakeholders come together to discuss challenges confronting both the demand and supply sides of the insurance sector in the country.
According to him, “customers’ satisfaction is central to the sustainability and success of every business, insurance inclusive. We are aware of some of the obvious challenges bedevilling the sector either on the side of operators, consumers, investors or regulator. These challenges could be very overwhelming, however we must not relent in looking for better ways to effectively and efficiently ensure delivery of quality services to policyholders.”
The occasion provided an atmosphere for the insurance consumers, some of who are not satisfied with developments in the industry to bare their mind and even threatened to cede their risks offshore.
A case in point was that of members of Airline Operators of Nigeria (AON), who called on the NAICOM to quickly intervene and address the enormous challenges they are having with local insurers.
The AON members noted that most insurance firms over the years continue to renegeon payment of claims due to excuses that are not tenable.
Calling for an open market to enable airliners insure freely without hindrance, the Chairman of AON, Captain Ahmad Joji, noted that his members were really not having good times with local insurers.
The Chairman/Chief Executive Officer (CEO), Barbedos Group, Alhaji Kashim Shettima, narrated how his underwriter failed to respond to an accident complaint on one of his aircraft.
According to him, having reported the incident to the underwriting firm, the company instead of getting back to him went and reported the issue to their foreign partner (underwriter), who called him for an enquiry.
He called on NAICOM to grant airliners the liberty to insure abroad, where aviation business is properly handled, saying aviation business should not be handled with kids gloves, as any mistake can lead to great mishap.
However, the Commissioner for Insurance reassured the policyholders, saying “from the regulatory perspective, policyholders remains a key component of our primary constituency and therefore must ensure they are treated fairly and protected as enshrined in relevant laws; while at the same time balancing the supervisory role of ensuring financial soundness and reliability of insurance institutions in the country.
“Suffice it to say that consumers are faced with challenges that may vary from one individual or entity’s experience to another while the provider is faced with constraints that may also differ from one company to the other. But there is no doubt regular interaction such as this one will amongst others foster a better understanding and synergy that will result to better services to the consumer.”
Recalling the need for the parley, which is in its second phase, he said the commission took the step in 2018 to incept this platform to provide the most critical stakeholder in the sector, which is the consumer, the opportunity to be heard and be informed first-hand on the workings of the sector.
“Last year’s session was adjudged to be a huge success as critical issues affecting consumers of insurance products were brought to limelight. Some of the takeaways from the event were the need for insurance companies to improve the quality of their service delivery, need for operators to launch innovative, consumer – specific and problem-solving products, need to leverage on technology to deepen insurance penetration and above all, need to ensure prompt payment of claims.
“Let me inform you that these takeaways from the 2018 interaction with insurance consumers significantly contributed and shaped the commission’ policy formulation process and eventual issuance of guidelines and circulars to the industry this past one year, especially in the areas of quality service delivery and ease of doing business.
“It is imperative to note that NAICOM is well positioned to ensure adequate protection of policyholders at all times. As you may all be aware, the topic on consumer protection has become central to regulators around the globe and the insurance sector is not an exception. Continuing efforts and new reforms are being put in place by NAICOM to ensure prompt payment of genuine claims by insurers.”
The commissioner pointed out that the complaints bureau unit of the commission had also been working assiduously to resolve policyholders’ issues relating to non-settlement of claims, contract agreement violation etc, adding that the unit had been further enhanced with the deployment of more staff at very senior level to effectively discharge assigned responsibilities.
“Its doors are widely open to receive and resolve, as much as it can, issues on non-settlement of genuine claims from the public.
“The commission has strong passion that insurance consumers are served right and feeling your pulse on the services offered you by your insurers will feed us with ingredients needed to strategise on repositioning the industry for better services. There is no doubt that we all desire a paradigm shift from the current state of our industry to a better state where we will not be grumbling on issues of prompt claims settlement, pricing of insurance products, value for money, innovative products etc.
“However, you will agree with me that none of these could be achieved if we don’t come together and discuss our successes and failures. I therefore implore you to feel free to express your views and speak on your experiences as consumers of insurance products in Nigeria.
“It may be worthy for you to note that recent developments and reforms in our sector particularly, the recapitalisation exercise is a move to ensure that the industry becomes more robust in its technical competence and financial base. The process is aimed at repositioning the sector for self-actualization in terms of growth and development; the end result of which will be to enhance the ability of insurers to provide better protection and improved services to the customers.
“Let me reassure you that the Commission shall continue to introduce new reforms and initiatives in line with international best practices for consumer protection and customer satisfaction. Henceforth, insurance companies will be assessed and ranked on the quality of their service delivery to customers and the ranking of companies in this regard will be made public in order to provoke healthy competition among insurers. This we believe will boost consumers’ choice and confidence in insurance,” he added.
The reassurance to the consumers came barely one week after the industry regulator also enlightened shareholders on the need for the ongoing recapitalisation.
According to the commission, not less than N16 trillion worth of risks were ceded offshore last year alone due to low capital and technical capacities in-country.
With developments tilting towards a positive perspective for the sector, the only far-reaching solution to sustain and better the situation is for the industry regulator to ensure that claims are paid promptly just as operators who default in this regard and are also into other form of infractions are penalised to the knowledge of the public.