Ebere Nwoji
The global economic crisis thought to have abated but still biting hard on many economies Nigeria inclusive, is currently affecting willingness of insurers to pay claims as well as their mode of business operations.
The development cuts across insurance markets in different climes.
The situation, THISDAY checks reveal has created friction between underwriters and insurance buyers in some markets.
In some cases, it is even soiling good relationships between insurance brokers and underwriters due to stringent conditions and clause interpretations often raised by underwriters when risk crystalises
Here in Nigeria, customers of insurance companies said they were no longer at ease with the rate of claims denial by insurance firms.
Some of the aggrieved policyholders have threatened to take it personal with insurance agents who sold policies to them, but could at the maturation of the contract not stand by them to get their claims paid by the insurance firms.
Some policyholders have gone to the extent of threatening the lives of such agents if their insurers deny them their claims.
On their part, the agents themselves get disappointed at the behaviours of management of insurance firms they work for towards claims from policies they sold to the public.
A case in point was the confession of one of the agents working with a big insurance firm in Nigeria.
The company is one of the firms recently bought over by a popular global insurer.
According to the agent, she prevailed on a cousin of hers to patronised her company by buying an investment related policy from the company through her.
She said her disappointment came when the policy matured after three years and when the policyholder demanded to take back her money and the proceed as the contract was interest related, the company delayed the claims payment for more than six months and when eventually it was paid, the client could not get exactly his savings let alone the interest.
She said when the client questioned why his complete entitlement wasn’t paid, he was pointed to a clause in the policy document that explains why she could not have her money complete but was told that she gained free life insurance cover attached to the policy.
Another case in point was a journalist who insured all his working tools against theft with one of the big firms located in Ikoyi area of Lagos.
On his way back from work one day, he was attacked by hoodlums who collected all his working tools including IPad, phones, camera, all of which he took insurance cover on. When the journalist filed his claims, the insurer pointed out a clause in the policy that could not accommodate the claims because the incident happened due to his carelessness of working in the late night with those working tools.
Surprise enough, insurers from western world markets often used as reference point when talking about places where insurance works are not immune from this strange behavior towards claims settlement.
Participants in the Spanish and Portuguese leg or of European Risk Frontiers survey on claims payment by insurers have this to say concerning claims handling by insurers in the countries.
“We have noticed, as a rule, a change in claims management processes, although 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 have been sparked by some clauses being interpreted in a way that is more restrictive than they were in previous years, even though the same typology of the losses and the same clauses are applied. I hope that this is not something that will get even worse, as the provision of adequate answers to claims is the reason why insurance exists, and that should never be questioned,” she added.
David González, chief insurance officer at construction group Sacyr, agreed that the hardening market has “complicated” claims.
“We have seen longer claim settlement processes and ever more strictness in the adjustment of losses. On some occasions, there have been more tensions with insurers to solve a claim. It is true that there have been more conflicts and disagreements in the market, and that generates tension. From this point of view, relationships have changed in the market,” he added.
But claims are not the only concern for buyers in the current market. Luis Campilho, insurance manager at engineering services group Efacec, pointed out that even day-to-day interactions seem to be getting more laborious.
“We have noticed that the time it takes for insurers to answer our requests has worsened significantly of late, and especially in 2021,” he said. “In one particular case, the issuance of a simple document linked to a policy, which would usually take one or two weeks, took more than 45 days to be delivered by the insurer. Even the underwriting process is taking significantly longer than usual.”
A Nigerian broker told THISDAY that what often cause this problem is the use of university graduates who know nothing about insurance in selling insurance products.
He said, these graduates are given targets by their insurance firms which they must meet every month.
He said in a bid to meet these targets, they promise insurance buyers what the policy they sold to them could not deliver when Claim occurs.
He said when there is claim and core insurance underwriters begin to interpret the terms of the contract, the client would become confused and will assume that insurance firm has duped him.
He however said the Chartered Insurance Institute of Nigeria is on top of the problem through compulsory training for anybody that wants to sell insurance.
