When Policyholders Are Informed, The Insurance Industry Will Be Reformed (Part 1)

By Ekerete Ola Gam-Ikon

While the insurance industry in Nigeria is grappling with understanding the critical importance of Character, Capital and Capacity Building to the growth and development of the business side of insurance, most policyholders have continued to remain in the dark about the state of affairs of the sector.

This is still part of the “Insurance War” I wrote about recently because there are conscious efforts to ensure the customers are not informed (that means they are kept in the dark) about developments in the sector.

The Claims Debacle

Everyone involved with the insurance sector knows the defining effect of claims to the business side of insurance. Claims, when paid gives relief and joy to the individuals and organizations; when unpaid, brings pain and agony to them, probably leading to the end of some life-long dreams.

Considering the critical effect of claims in the relationship between policyholders and insurance operators (insurers, agents, brokers, loss adjusters) and the regulator, both sides have seemingly weaponized it at the slightest opportunity to discuss the status of the insurance sector.

The test of the character of the insurance sector is best expressed in the way and manner claims are managed.

Most policyholders are quick to declare that the insurance sector operators hardly pay claims. As I pointed out in one of my previous post, you can hardly find those that got their claims paid as they’re often unwilling to testify.

Meanwhile, the regulator readily assures and reassures distraught policyholders that the Commission is at the verge of using its big stick on financially weak insurers for failure to pay claims yet not enough seem to be done to convince the insuring public.

May be to reduce such poor show of character on both sides, the insuring public, not just policyholders need to know how the Claims Paid totalling N318b as at December 31, 2022, according to the regulator, was distributed across all insurance companies.

We must also remember that there are Unpaid Claims, some for 7 years, amounting to tens of billions of Naira, which the identified and verified policyholders have been waiting for. Reportedly, that is how many Claimants wait for their payments only to learn that the Certificate of Registration of their insurers had been withdrawn by the regulator, NAICOM.

As often heard about situations like this, analysts and watchers tend to wonder and say “Who is fooling who?”

If Claims Management, despite the hues and cries by policyholders and the adoption of tech solutions provided by insurtech firms, continues to be the core problem of the insurance sector as the regulator announced recently, then the need for serious diagnostic action of the insurance sector cannot be overstated.

Claims remain the oxygen, or otherwise, of the insurance business!

From several experiences, many people have used the management of claims to determine the character of the insurance industry in Nigeria. Today, this is certainly not a case of “Who will bell the cat?” It is now a case of “How do we bell the cat?”

When you have a claim with an insurer, be aware that there are many “Classes of Claims” some of which are:

• Claims Reported Not Yet Registered;
• Claims Reported, Registered and Awaiting Supporting Documents;
• Claims Inspected and Offer Sent to Claimants;
• Claims Fully Documented and Recommended to Loss Adjusters;
• Discharge Vouchers (DV) Exchanged and Signed by Insurer and Claimant to Accept or Reject Offer for Payment;
• If Rejected, Claimant May Decide to Report Issue to Regulator or Trade Association But Note That the Law Requires NAICOM to Intervene in Cases Which Have Been with Insurers for 90 Days Though Relaxed by Regulator;
• Claims Reported to Regulator’s Complaints Bureau;
• Claims Adjudication Panel;
• Claims Awaiting Settlement. Please Note that Claims Settled Is Different From Claims Paid.

In between the above mentioned “Classes of Claims”, there are a number of others depending on the class of insurance involved.

The question now is: “What is your Class of Claims?” When you have the answer, you’re half way into better understanding the insurance claims management process.

Follow Carefirst Consult on social media for more on claims or if you can attend its 2nd Insurance Claims Advocacy Conference holding tomorrow at NIA House in Lagos, you’ll learn more.

Send in your comments and questions and be assured to get my answers.

Ekerete Ola Gam-Ikon  writes via +234-802-585-0344 and olagamola@gmail.com