A new study of the insurance industry in Uganda has revealed persistent continued dishonesty as well as withholding vital information by practitioners, a major source of public mistrust.
The Policyholder Satisfaction Survey that was conducted this year courtesy of the Insurance Regulatory Authority (IRA) revealed that between 33 and 42 percent of the current insurance policy holders are not satisfied with the service delivery.
The level of satisfaction varies from company to company and also what type of policy one is holding.
The main complaints continue to be in regard to claim settlement, with the study revealing that some customers have been frustrated to the extent of abandoning a claim that was due for clearing.
“I received a lapse notice on my email for non-payment of some of the monthly premiums and called the insurance agent who assured me all was well and that the challenges were caused by a system migration. All the calls made thereafter went unanswered,” the customer said, adding that when he visited the company, they referred him back to the agent.
“I contacted a friend at IRA and was advised to lodge a complaint with the Authority. The Authority has since invited me together with the company and listened to both sides. The company was insisting until I produced a bank statement showing that I had money in my account at the time of the premium deduction but the order was not cashed. Out of frustration, I was not willing to continue with the policy. Thanks to IRA, my premiums have been refunded.”
Another was of a customer whose claim had been approved but had to walk to the office eight times on different days to get a discharge voucher and when it was finally granted, it took another 29 days to get a claim paid.
IRA Chief Executive Officer, Ibrahim Kaddunabbi Lubega says it is such insurance companies that taint the image of the whole industry.
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It was also revealed that prospective customers are not given all the vital information mainly because the insurance agents rush through the process so as to get as many clients as possible. In the end the customer either signs for policies they do not understand, or they abandon the company and seek better services.
This, Haj Kaddunabbi says arises from the management setting targets for their sales agents who in turn have to rush to get the clients without giving time to explain to the prospective policyholders what they are going into.
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Another policyholder explained how they lost their two-year savings after being out of employment for a year because the insurer insisted on the customer paying up the arrears.
“I had a saving policy for five years, unfortunately after two years, I lost my job, I however notified the insurer. After one year, I got another job, I then requested the insurer to extend the policy period and reschedule the payment period. They insisted that I had to clear all the arrears first for them to reinstate. The only option I had was to cancel the policy, and lose all my earlier savings,” the client says.
The IRA CEO says this is wrong for a business that is looking to attract more people and could lead to failure unless such issues are addressed.
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The report also warns the insurers about the increasingly expanding informed society, aware of their legal rights.
He was referring to a client who was advised to leave her hospital for another one after the first one asked the client to get approval from the insurer.
“I visited a facility that was on the list of accredited providers for maternity services as my wife was due for delivery through the caesarian section. I was advised that I needed approval first from the Insurer. When I contacted them, I was told that I should go to another facility because where I was they wouldn’t cover that service. I was disturbed and wondered whether it was actually in order for Insurers to assume such a specialized role,” the customer said.
Kaddunabbi-Lubega said it is the duty of the insurance company to be clear on what services their clients can expect from the policy before they even go to the hospital.
Explaining the risk such a client faced, the CEO urged the insurance companies to think of the impact of their decisions on the customers and also on the long-term impact on their own businesses.
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The report shows that 77 percent of the people were satisfied with the process of the client paying the premium to the insurance company, while 77 were happy with the customer care service.
On Communication, the insurers got 68 percent approvals, the same as with claims handling, while complaints resolutions only got approval from 52 percent of the correspondents.
The factors that affect customer satisfaction, according to Lubega are reasonable pricing, claims management, the efficiency of competence of staff handling the customer, as well as the relevance of the policy being marketed.
Another is how easy it is for the customer to appreciate the terms and conditions, the convenience and reliability of the product and its availability, and how simple it can be understood by the client.
However, discrepancies between the information presented in advertising and the facts that emerge during claims, delayed and nonpayment of claims, failure by insurers to provide regular updates, and lack of notification of premium receipt can chase away the client, according to the report.
Others are flexibility in premium payment, knowledge about the policyholders’ benefits and rights, response to queries, bureaucracy in service delivery, and unexplained terms.
The study which involved 384 policyholders with 298 responding, was aimed at finding out what the public thinks about the sector and what can be done to improve service delivery.