- November 24, 2017
- Posted by: Uganda Insurers Association
- Category: News
Insurance is essentially there to have peace of mind to individuals and companies from the fear of things going wrong. For this to happen successfully, we need trust and confidence in the insurance sector. That is why the overall aim of the Insurance Regulatory Authority of Uganda (IRA) is to work with all insurance industry players to enhance public trust, so that when consumers purchase insurance products and services, they can be confident that these products do exactly what they say they will.
Unfortunately, one of the common challenges facing the insurance industry in Uganda is the low public confidence. This is mainly arising from the different views in interpretation of various policy provisions and clauses between the policyholder and the insurance company which in some instances result into disputes.
In insurance business, there are varying interpretations between the policyholder, the insurer, the insurance broker and the regulator as to what the policy intended to mean. Whether the dispute is resolved at the IRA’s Complaints Bureau, in courts of law, arbitration or it goes unresolved, the fact remains that the damage caused in terms of reduced public confidence is immense.
So, how can the industry go about achieving building and raising public confidence and trust in this promising market?
Securing public confidence and trust calls for full disclosure of product features, being honest on the terms and conditions of the policy, especially at the initial stage or at the point of sale. We need to refrain from disclosing only favourable terms that would inappropriately influence a customer’s decision to purchase insurance. Providing incomplete information to influence purchase is unacceptable and trust would immediately dispel when a customer’s claim is not honoured. Remember the valuable business of insurance is claims management. If the claim process is not well managed trust will definitely be lost.
Secondly, the main benefit of trust and confidence lies in customer loyalty as this many times lead to long-term relationships and higher advocacy or word-of-mouth. Trust in insurance is more important for insurers than any other type of business mainly because insurance is about selling a promise.
Customer service should continue even after the close of a sale/after signing the debit note, and most importantly at the point at which a claim arises.
The way forward for us as an industry is to improve our customer relationship for example by riding on the digital platforms to deliver better services. This familiarity with technology is giving prospective clients and many other people the confidence to try more complex insurance interactions online. Having a conversation with an insurance advisor through a video chat on how to settle a claim is helpful to a customer to better understand the information shared. Likewise, many other insurance enquiries can be addressed in just a simple chat.
As an industry we may also ask ourselves whether we have done enough to meet the needs and demands of our customers. On many occasions, we are reminded that in transitioning into the changing insurance market, we can no longer afford to rely solely on traditional business models and distribution channels. We need rather, to invest in innovation and sales development to deliver the desired trust, confidence and growth. The Authority commends players who have been at the forefront of developing innovative products and services, which are lifting people out of poverty and are promoting small and medium enterprises development. It’s time we continuously evolved to meet the needs and preferences of the consumers which are rapidly changing.
We must proactively and strategically position ourselves to offer products via diverse distribution channels to reach out to different segments of the untapped population. This will cement the most desired public confidence we are still yearning for in the insurance sector.
Insurance Regulatory Authority of Uganda