Resolution of claims scores lowest in insurance survey 

The survey  recommends that insurers should find a way of offering genuine incentives to  policyholders, who do not make a claim during the policy term.  Photo / File 

What you need to know:

  • Whereas the survey returned a 74 percent overall performance of the insurance sector, key survey areas such as resolving claims and communication scored lower than others

Resolution of claims scored lower than any other survey area in the Policyholder Stakeholder Satisfaction Survey conducted by Insurance Regulatory Authority (IRA). 

The survey, which sampled customer response in regard to premium payment, customer service, claims handling and insurance pricing, among others, noted that resolution of claims, which remains a sticky issue in the insurance sector, was slightly above average scoring 52 percent. 

Payment of premiums, which is principally the function of policy holders, scored the highest at 77 percent. 

Customer service scored 72 percent while communication from insurers scored 68 percent, capping an overall insurance sector performance score of 74 percent.

Some insurance sector players have identified unsatisfactory resolution of claims as one of the factors that are upstaging insurance uptake in Uganda. 

This, as a result, has hindered penetration of insurance, which remains under 1 percent. 

Dr Hillary Wachinga, the Kenya Re Group managing director, recently said that unwillingness to pay claims and pricing of policies were some of the key factors upsetting uptake of insurance. 

“Before we set up an office here, we analysed the market to determine what clients want. We noted that they consider price, ability and willingness to pay claims,” he said. 

The survey also measured public perception about the performance of insurance products pricing, efficiency in claims management and adequacy of technical expertise, which are key in a sector that requires a wide range of expertise. 

Others included relevance of products to the needs of customers, ease and extent of appreciation of terms and conditions of the products. 

The survey also found that there was a big discrepancy between information presented in adverts and what is actually delivered, especially in regard to claims payment, where respondents noted sector regulator needs to come out clearly in regard to delayed and nonpayment of claims. 

Respondents also want the regulator to ensure that insurers inform policy holders of their benefits and rights as well as simplify payment plans, terms and conditions into understandable language, reduce bureaucracies, especially in regard to approvals related to medical. 

Mr Ibrahim Lubega, the IRA chief executive officer, said that whereas economic dynamics provide that demand for a product rises with a decrease in prices and vice versa, providing a great customer experience had become even more important in many aspects in the insurance sector. 

Therefore, he noted, in order to increase insurance uptake, the quality of services provided in areas of customer care, communication channels, claim payment and complaints management must improve.

The study also recommended that the insurance sector must do more in regard to providing customers with monthly and annual statements, especially those holding life insurance policies as well as developing and providing legitimate incentives for clients who have policyholders, who do not make any claim during the policy term.

Other recommendations included training and improving of customer relationship as well as ensuring that customers understand newly innovated or existing policies before rolling them out.

Insurers must also consider short-term policies that cover periods shorter than five years to cater for individuals, who are working on short terms contracts and streamline complaint and customer care desks to ensure policyholders’ complaints are handled expeditiously.