Putting insurance policyholders first

A TYPICAL DAY IN THE INSURANCE business environment in Nigeria, where I am very familiar with, has the Chief Executive Officer (CEO) focused on what inflows have been generated so that he or she can comfortably engage the Directors and Shareholders when they are discussing either in formal or informal meetings. Like in other businesses, the CEO that performs well has the ears of the Board, so in insurance, the premium income the company rakes in determines the health of the relationship.

However, the CEO will often delegate the responsibility of income generation, as it also happens in other businesses, thus enabling more time to be given to corporate governance issues especially interactions with the regulator, National Insurance Commission (NAICOM), besides the aforementioned engagements with the Board.

Not many insurance companies have written policies and procedures regarding the handling of existing and potential policyholders; even where it exist, the discretion of the CEO or most senior officer determines what happens to the
cases of policyholders. This is what Insurtech is now challenging and attempting to take away – that discretion, to be or not to be!

Just to better understand the situation in which policyholders’ issues are attended to, if the CEO and other C-suite officers are brokers-oriented, priority would be given to the policies (contracts) that the company got through insurance brokers. Some brokers have large sized accounts that may be delivering 20 or more percent of the insurance company’s annual income, so they will often receive prompt and direct attention of the CEO.

Arguments continue in respect of the status of the insurance broker within the insurance company: Is the broker a
customer or not? Guess we can leave that debate for another day and focus on how the policyholders are winning the front row, thanks to technology, Fintech and Insurtech.

Meanwhile, amongst the stakeholders of these companies especially those with marketing and business development responsibilities, the impression would be well shared regarding the kind of stories that will attract the attention of their CEOs. The sounds of the inflows would have to be deep and heavy at all times, I know by now you are wondering what happens to the potential and prospective individual businesses the Insurance Agents bring into these companies on a daily basis. Not to worry, that is where technology is taking root in the insurance industry in Nigeria and elsewhere.

What the Policyholders Know Often, it has been said that “What you don’t know, does not hurt!” However, it is one’s experience that will largely validate or invalidate this statement. When insurance policyholders did not know that their insurance policies were contracts or the amount of premium they pay affects payment of claims, or even that, like other financial services providers, insurance companies can deliver automated experiences; they had no reasons to fret and feel deceived.

Today’s policyholders know that all the above highlighted conditions exist and more. Thus, they are demanding for the smooth experiences they enjoy from their banks, stockbrokers and other financial services providers including regular updates on the state of the companies, their accounts and regulatory actions affecting their operations.

Until now, only a few insurance companies do some of these things and policyholders now know they can get more.
Thankfully, the lockdown, necessitated by the fear of COVID-19 pandemic, revealed that most insurance companies and
brokers could respond well leveraging online tech solutions, unlike before when policyholders will hear that same services could only be done physically.

Policyholders also now know which insurers can deliver what they say they will. For example, if you seek to insure your property – new vehicle or house, you simply need to provide the address or coordinates of your location and the inspection of the insurable item can be undertaken with full video recording and cover would be provided.

Convenience, speed and transparency, which are of critical interest to policyholders would have been achieved in the course of such recorded inspection prompting the question: If this can be done, why can’t it be done consistently, and regarding other areas of insurance business? To manage their expectations effectively, policyholders then need to know that not all insurance companies have the financial strength to offer such quality of service continuously as was seen during the lockdown.

Knowing the Insurers that Put Policyholders First As tech enablers take over the routine jobs that humans (employees) were doing, often grudgingly, to please policyholders in the insurance industry, policyholders will still have the responsibility of knowing and doing business with the insurers that put their interests first. These insurers are increasing their investment in certain tech solutions that will engage their existing and potential policyholders seamlessly. You cannot afford to be on the wrong side.

Contract wordings, claims settlement procedures, innovative products and the experiences policyholders, generally get when they meet the insurance companies and when the unexpected happens, are critical in determining whether your insurer puts you first or not. Given the persistent reluctance of people to buy insurance until they are
forced to, the insurers keen to excite policyholders will become comfortable to show them what they have put in place to respond promptly when claims are reported, as they have when they want you to buy.

The CEOs of the insurance companies that put policyholders first actually have a lot to do to make policyholders believe and trust their tech enabled platforms and applications. This is because of the unique position of insurance, which involves selling promises and protecting the policyholders from the devastation and agonies that follow crises and disasters.

You only know the reputation of your insurer and the value of the product you bought when you have a claim! Ask for the claims settlement procedure of the insurance company you have your policy and share your experience with us.
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