The global economic crisis thought to have abated but which is still hitting many economies, including Nigeria, is currently affecting the willingness of insurers to pay claims as well as the way they operate.
Development crosses the insurance markets in different climates.
The situation, revealed by THISDAY’s audits, has created friction between insurers and insurance buyers in some markets.
In some cases, it even taints the good relationship between insurance brokers and underwriters due to strict terms and term interpretations often raised by underwriters when risk crystallizes.
Here in Nigeria, clients of insurance companies have said they are no longer comfortable with the rate of denial of claims by insurance companies.
Some of the aggrieved policyholders have threatened to lash out at insurance agents who sold them policies, but when the contract expires, may not help them get their claims paid by the insurance companies.
Some policyholders have gone so far as to threaten the lives of these agents if their insurers deny them their claims.
For their part, the agents themselves are disappointed by the behavior of the management of the insurance companies for which they work with regard to the claims of the policies which they have sold to the public.
One example is the confession of one of the agents working with a large insurance company in Nigeria.
The company is one of the companies recently acquired by a popular global insurer.
According to the agent, she convinced a cousin of her to sponsor her business by purchasing an investment policy of the business through her.
She said her disappointment came when the policy expired after three years and when the insured asked to get her money and proceeds back because the contract was tied to interest, the company delayed paying claims for longer. six months and when it was finally paid, the client couldn’t exactly get his savings let alone the interest.
She said that when the client asked her why her full fee had not been paid, she was pointed out with a clause in the police document which explained why she could not have her full money, but she was told said she got free life insurance coverage attached to the policy.
Another case in point is that of a journalist who insured all his work tools against theft from one of the large companies located in the Ikoyi district of Lagos.
On his way home from work one day, he was attacked by thugs who collected all of his work tools, including iPad, phones, camera, all of which he took out insurance for. When the reporter filed his claims, the insurer pointed to a clause in the police that could not account for the claims because the incident happened due to his neglect to work late at night with these work tools. .
Surprisingly enough, insurers in Western world markets often used as a point of reference when talking about where insurance works are not immune to this strange behavior towards claims settlement.
Participants in the Spanish and Portuguese section or in the European Risk Frontiers survey on the payment of claims by insurers have this to say about the treatment of claims by insurers in countries.
“We have generally noticed a change in claims handling processes, but not in all segments, nor by all insurers. Claims settlement has become slower and more complicated, ”said Lourdes Freiria, Director of Risk and Insurance at Grupo San José.
“The biggest disagreements were caused by certain clauses interpreted more restrictively than they were in previous years, even though the same typology of losses and the same clauses are applied. I hope this is not something that will get even worse, because providing adequate responses to complaints is the reason insurance exists, and it should never be questioned, ”she said. added.
David González, director of insurance for construction group Sacyr, admitted that the tightening of the market had “complicated” claims.
“We have seen longer claims settlement processes and increasingly stringent loss adjustment. On some occasions, there has been more tension with insurers to resolve a claim. It is true that there have been more conflicts and disagreements in the market, and this generates tensions. From this point of view, relations have changed in the market, ”he added.
But complaints aren’t the only concern for buyers in today’s market. Luis Campilho, director of insurance at Efacec engineering services group, pointed out that even day-to-day interactions seem to be getting more laborious.
“We have noticed that the time taken by insurers to respond to our requests has worsened considerably in recent times, and especially in 2021,” he said. “In one particular case, issuing a simple policy document, which typically took a week or two, took over 45 days to be issued by the insurer. Even the subscription process is taking a lot longer than usual.
A Nigerian broker told THISDAY that what often causes this problem is the use of college graduates who don’t know anything about insurance to sell insurance products.
He said, these graduates are given goals by their insurance companies that they must meet each month.
He said that in an effort to achieve these goals, they promise insurance buyers what the policy they sold them might not offer when the claim arises.
He said that if there is a claim and major insurance underwriters start to interpret the terms of the contract, the customer will become confused and assume the insurance company has duped him.
He said, however, that the Chartered Insurance Institute of Nigeria was at the peak of the problem with mandatory training for anyone wishing to sell insurance.