Service delivery: Litmus test for
recapitalised insurance companies
Ayeleso Oladele, Lagos
Fola Daniel, Insurance Commissioner
Now that the much-awaited final list of recertified insurance companies in Nigeria has been
released by the National Insurance Commission (NAICOM), with a total number of forty-nine insurance companies: Eighteen composite, twenty three general business, seven life business and one reinsurance company,it is certain that the public will be more interested in the service delivery of each of the companies
Even before the completion of the exercise in February this year, finance and insurance experts were of the opinion that if the industry was to live up to the standard expected of it, the issue of service delivery should take a centre point in the activities of the insurance organisations
Following the release of the list of the successfully recapitalised companies, NAICOM, in addition, made a promise of prompt release of fund in the escrow account with the Central Bank of Nigeria. The present commissioner for insurance, Mr. Fola Daniel had promised the operators of the release of the fund since he assumed duty as the commissioner but hadalways failed. But, from all indications, it seems as if the commission meant its word this time around as some operators had testified to the release of the fund. The release of the fund is expected to yield positive impact in the area of providing operating funds for the insuarnce companies that scaled the consolidation exercise. It is also expected that this will produce stronger companies. The feeling all over is that now that the industry is set to witness positive changes that will add values to all classes of insurance consumers, the sector is set for greater heights.
The impressive trend that emerged from the consolidation exercise was the injection of no fewer than N15 billion into the sector by foreign investors and mergers and acquisitions that will certainly enhance the sector’s capacity and profitability. Going by the analysis of insurance experts, it is clear that a new course of higher risk retention capacity and its attendant benefits has been charted in Nigeria’s insurance industry.
Although, the race has just started, the insurance operators are no more folding their hands to watch theunfolding events but are, rather, on their toes to ensure they emerge the leader in the industry. But beyond the quest for market share and market leadership, the insurance sector needs to experience industry- wide strategies aimed at enhancing service delivery. Emerging as the market leader, operator of the vision driven companies should note that the average insurance consumer is expecting much more, and the sector needs to be equipped to deliver timely, qualitative and hitch-free services.
In fact, service delivery is set to become a barometer of sorts that clients will use to measure the impact of the consolidation exercise on insurance transactions. The sector runs the risk of being seen in bad light if one company fails to perform this time around. This may translate to a blanket vote of no confidence on the whole industry. Consequently, operators’ pre-consolidation promise to delight the customer should not be mere rhetoric, it should be faithfully kept in all transactions. In deed, this is the real challenge that must be squarely addressed by all operators.
Prior to the consolidation exercise, only a handful of players in the insurance industry sought ways and strategies to effectively overhaul their customer service machinery. The sector cannot afford that now as companies that are not compliant with advancements in customer care will fail to win the patronage of existing and prospective clients. Currently, the trend of service delivery campaign appears to be localised to the corporate head offices of the insurance companies alone. What about the regional and branch offices? It is imperative that every insurance office is well equipped to provide efficient and effective services as can be obtained in the head office. Companies will be sure to lose their clients if they always have to get to the head office to effect transactions.
The history of poor service delivery in the insurance sector can be traced to manual manipulation and storage of client transaction records, and poorly run corporate affairs and relationship management departments - where such structures are available at all. It is on record that customers spent ages trying to get information on their transactions. The good news is that all of these had been consigned to the past. However, a lot more still need to be done in this regard by industry players. Computerisation of all processes should be a key target for all insurance operators to facilitate the maintenance of foolproof records of transactions that are the hallmark of the highly competitive financial services industry. Already, insurance firms that have invested heavily in information and communication technology (ICT) infrastructure have recorded marked improvements in their service delivery machinery. And you know what? This had led to repeat purchases and deeper bonds of trust and loyalty for such companies. All over the world, ICT is transforming how consumers make the decision to buy in the market place. The insurance sector cannot afford to be left behind.
Another concern for service delivery issues in the sector is the presentation and design of insurance policies. The industry must continue to craft and present its policy document in packages that not only meet clients’ expectations, but should also delight them.
The approach of the sector must be geared towards ensuring that the client understands every aspect of the cover being offered. This reassures the client and helps to wipe out widely held notions that insurers deploy complex terms to cheat clients in the event losses. The industry must, as a matter of necessity, gear up for the deployment of more robust and effective service delivery in all ramifications. Chief executives, top management teams and all cadres of insurance workers should undergo courses in customer relations management (CRM) to be able to continously meet the yearnings of the investors and their clients.
The focus of such courses will serve to re-orientate, train, and retrain employees in the art of adjusting to emerging trends in customer care management. The courses which will throw up the characteristics and training needs of employee group(s) responsible for facilitating relationship with external publics will come handy for all insurance companies. CRM courses will also equip top management with the ability of appropriately communicating the company’s customer care policy to every member of staff that is involved in the marketing of the company’s products and services.
In deed, things are looking up for the insurance sector and operators need to seize the moment by creating a business environment that treats the client like kings, one that reassures clients of insurers’ desire to handle all transactions professionally and with utmost good faith, one that offers all clients qualitative services regardless of the location and status of the insurance company involved and one that encourages transparent and prompt settlement of claims.
