Tuesday, October 29, 2019 / 08:29AM / By Ekerete
Ola Gam-Ikon* MNIM, CPP / Header Image Credit: Invest India
A time was, nearly fifty (50) years ago, when the working class in Nigeria trusted (YES, TRUSTED) the insurance companies and their agents! Unbelievable? BELIEVE it.
It was the time that trust existed in huge measure in our financial transactions, savings was a culture and credit was part of our trade pattern. Policyholders were mostly 8am to 3.30pm workers who paid their premiums by Standing Orders given to their banks especially for individual Life policies. Being an insurance agent at the time was a very envious career as they spent their earnings (commissions) on common symbols of achievement including automobiles and wears. Everyone knew an insurance agent from a mile!
Insurance companies and the agents were operating in an environment where trust swelled with little discourse. Our nation and leaders had the "trust environment" similarly enjoyed by all, until we began to experience the effect of the very independence we had got as a country. Principally, we began to fight for space as the spirit of independence transcended the national level drilling down to every facet of our lives.
Losing The Trust
In insurance, the professionally trained brokers arrived to take space from the insurance agents who were merely trained to follow a script then pick up standing orders and payments either in cash and cheques. Similarly, insurance professionals emerged to conduct the business based on principles that were least understood by untrained but passionate workers within the insurance industry. There was thus an era when the insurance agents began to lose confidence in the emergent "insurance system" and unsure of how they will end, became corruptly reliant on the premiums paid by policyholders for sustaining their lifestyles. Insurance companies were no longer receiving premiums as at when due, policyholders stopped seeing their agents and, upon approaching their insurers, heard horrifying stories from non-receipt of premiums paid to agents to resultant denial of their claims. Bad stories sprint, and the insurance agents who had been well known to everyone suddenly went "underground". Stories of insurance agents have only been repeated generation after generation till date.
Sales of individual insurance policies suffered a major blow and only a few insurers could be trusted by career civil servants and other workers in the formal and well structured environments. Today, baby boomers speak about the bad experiences of their fathers who gave those standing orders to the hearing of their children!
Now, it is easy to understand why the insurance industry in Nigeria today gets over 80 percent of its Gross Written Premium from governments and companies, often paying little attention to individuals.
Somewhat, the current recapitalization announced by the National Insurance Commission (NAICOM) has been associated with strengthening the position of some insurers to do more of the big ticket businesses while the market for individual policyholders might remain potentially open.
Regaining The Trust Requires Three (3) Re-Building Blocks
Increasingly, discerning members of the public demand for more awareness campaigns, education and enlightenment by insurance companies and the regulator. While this may sound pretty simple to communication experts, it does seem from what we see regarding the materials that insurance companies have pushed out, that there is a gap between what the public seeks and what we have on offer.
Commonly, the current campaigns we see are those inviting members of the public to BUY insurance then some go on to state the importance of insurance. Are these campaigns oblivious of the generational information shared or unmindful of the pains caused to those who had (have) claims?
Campaigns that border on awareness, education and enlightenment of persons who do not know or have mixed feelings ought to be more deliberate and specific. Can you ignore the fact that there are unpaid claims and hope that the prospect would also ignore the news making the rounds?
Sometimes, the requirements of the laws are used in the communication between the buyers and sellers of insurance and it often happens that the buyers might succumb once but go on to seek short cuts subsequently.
How was the communication in the years when TRUST existed?
Thankfully, the base of trust has shifted to a less human controlled and decentralized technology. This is where the insurance industry needs to shift to if it must thrive again and regain the trust of the people. It must change the mindset of waiting to be called and rather reach out to the public with the right product, right service, right channel and right atmosphere.
Can you win again and again when you cannot repeat what you did before to wow your customers?
Let more communication be about making the members of the public BELIEVE insurance and not BUY insurance!
By the stipulations of the International Financial Reporting Standards (IFRS), insurance companies are required to be even more transparent in their relationships with insurance buyers, however it does seem the spirit of transparency has not been brought to the insurance contracts and processes especially when there are claims.
While customers (policyholders) demand to know what the terms of the contracts are without reading as it is common with us, insurers are unwilling to display those terms and INSIST that policyholders MUST read the contracts or policy documents. This is where the issues related to delayed or denied claims begin.
Some policyholders pay for insurance merely to meet conditions elsewhere in their business and never bother about claims, something that many insurers are aware of and atimes, take advantage of.
To be transparent should be a condition precedent even as expressed by one of the core principles of insurance - utmost good faith but often it is difficult to say who should go first.
Notwithstanding, technology focused on insurance has simplified our processes to the extent that a few insurers just need to DECIDE to be transparent and will get the needed enablement not just to effectively manage claims in line with the expectations of the insuring public but also increase share of the market and contribution to the country's Gross Domestic Product.
We are deep in the age of collaboration especially as the Fourth Industrial Revolution plunges into our lifestyle which entails bringing our needs much closer. Can insurance afford to miss this opportunity to partake in the new environment of TRUST?
Entities collaborate for scale and value. The much you can achieve on your own is multiplied when you collaborate with, not one but as many parties as possible.
In most cases of succeeding collaborations, parties are connected by vision, systems and data. The insurance industry in Nigeria has what it takes to connect, so why is it not connecting and seen to be connecting indeed?
For example, it is still happening commonly that people buy cars and drive it off without genuine insurance while the Nigerian Insurance Industry Database (NIID) platform will have to wait until the owners of such new cars are "arrested" by insurance agents or friends that work with insurance companies. Can the NIID platform be twigged to allow car dealers register their sales and prompt authorized/licensed insurers to issue genuine insurance contracts?
Alone, it cannot work no matter the campaign about and around it until you connect with a collaborating party. Will we see this soon? Hopefully if the discussions between the insurance industry association and other parties are successful.
Overall, TRUST needs to return for the insurance industry in Nigeria to resurrect. It is the blood of the insurance business and while it is difficult to earn it, regaining it is even more complex but achievable IF insurance professionals can be more customer-centric.
That is where digital insurance excels!
About The Author
Ekerete Olawoye Gam-Ikon, MNIM, CPP is a management consultant with specialization in Strategy and Insurance. He can be reached vide telephone on +234-806-648-1111 and +234-802-585-0344 or by e-mail vide firstname.lastname@example.org
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