Insurance makes a big promise: pay premiums now when all is working, and I’ll be there in your darkest hours to provide the light.
In short, you buy a car, pay insurance money so that in case an accident happens, all the insured liabilities will be taken over by the underwriter.
And if you take up a 15-year education policy for your child, the money is paid back with a return—whether you live to see the maturity date of the policy or not.
These are expensive promises. Unfortunately, many insurers are breaking these promises when it matters most.
CIC Insurance General Manager for Business Initiatives Execution and Customer Experience Joseph Kamiri calls it a “hit and run” relationship.
The insurer is counting on increased investment in digitised processes to manage claims better in an industry where public outcry over rejected or delayed claims payment is rife.
“We have to create a lifetime relationship with emotional attachment, not a transactional relationship. Insurance should not be a hit and run relationship,” says Mr Kamiri.
Unfortunately, the hit-and-run perspective, which means collecting premiums and then running away from claims, is what is giving insurance a bad name.
Mr Kamiri says the insurer last year launched a portal that allows customers, among other things, to launch claims and track the payment process.
CIC says this is one of the ways to reduce the time it takes before customers are paid their claims.
This is in line with its promise to pay claims in general and life business within five working days. Funeral claims are to be paid in 48 hours.
But it has not been a simple promise for CIC and other insurers to keep. For instance, the latest data from the Insurance Regulatory Authority data (IRA) shows that out of 1,637 grievances filed by insurance customers in 2020, 900 or 55 per cent related to delayed payments.
Over the last six years, companies that have consistently made it to IRA’s list of insurers with high customer complaints include Invesco, Madison, Pioneer, Monarch, CIC, Britam, Jubilee, APA, Corporate and Kenya Alliance.
Mr Kamiri reckons that it can be frustrating when claims payment delays or when an insurer declines to pay what a customer all along thought was insured.
“It is unfortunate that insurance is consumed at the point of distress. That should not be the time for insurers to ask many questions or start explaining about exclusions,” he says. Some of the frustrations, Mr Kamiri explains, come because the insured does not know what exactly they have signed up for.
CIC is now addressing this through customer training. For instance, once it issues medical covers, it takes customers through what is covered or excluded and the procedure for making claims.
The top complaint by customers has been delayed settlement. Other key grievances by customers were declined claims, unsatisfactory offers, erroneous deductions and cancelled claims, according to IRA.
CIC says it now has a customer relationship management system to pick all complaints and track them until the end. Mr Kamiri says one of the reasons claims payment delays in the sector is the failure of many insurers to automate the process of receiving and processing claims.
“In life insurance, a CIC customer is now informed 30 days before maturity and is instructed on which documents to bring so that there are no delays at maturity,” he says.
“We have also started explaining exclusions upfront. Most claims that come to insurers are not payable in the first place because insurers have not been explaining exclusions well.”
But sometimes, it has been about the agents overpromising customers so that they sign up. IRA last year intervened by coming up with a standard policy template to rescue customers from this. This, Mr Kamiri says, boils down to the type of training insurers are giving to their agents.
Unfortunately, for many struggling insurers, that means thin budgets for training, enhancing the risk of agents misinforming customers.
“You find agents who have been in the industry for long, but if you look at what they are selling and what an insurer really offers, there is a material difference,” he says.
CIC says its checklist for agents is a high school certificate and some training in insurance. The insurer also offers continuous exams, which are offered and marked online.
Every week, Mr Kamiri says, the insurer also offers a compulsory half-day training to ensure that the agents are up to date with the company’s procedures. But he agrees that perfection remains a dream.
“Just like with any other industry, once you find quacks, things will not be done professionally,” he says.
CIC, which has operations in Kenya, Uganda, Malawi and South Sudan, posted a net profit of Sh259.52 million in the six months to June last year, up from a net loss of Sh335.53 million in the same period in 2020.