Marketing Insurance With Empathy

For as long as I can remember, the insurance subsector has been regarded by many as the underachiever of the financial sector. The reasons are legion. The banking sector contributes more to the Gross Domestic Product (GDP) than the insurance sector, the banks are also better capitalized and have bigger asset base than the insurance companies. In Europe and America, insurance companies own banks, but here the banks owned insurance companies until the CBN policy forced them to divest. Generally the banks are perceived to be contributing more to the Nigerian economy than the insurance companies.

However, the enormous potentials of the insurance subsector as a driver of economic stability and growth have never been lost on practitioners and the government. This was partly why the federal government in 2013 identified the insurance sub-sector as a one of the vehicles Nigeria will use to achieve its vision 20: 2020.

Among the challenges hindering the growth of insurance in Nigeria, which the former coordinating minister of the economy, Dr. Ngozi Okonjo-Iweala, rightly pointed out is lack of consumer trust. In an era where the customer’s kingship is being deified, lack of trust can deal a severe blow on the premium receipts of insurance companies.
In fact, take away premium income accruing from compulsory insurances and insurances made compulsory by certain sectors of the economy and what is left is negligible. The number of policy holders who voluntarily take up policies is much lower than those forced to take up insurance. This makes it imperative for a new paradigm in selling insurance: marketing insurance with empathy. Many marketers who go out there are mainly interested in meeting their targets and earning commissions when possible. As a result of this mindset, the interest of the insured takes the backseat. Insurance professionals must realize that even friends or family members who procure insurance policies through them do so because they want peace of mind; targets or commissions are incidental or secondary. They also expect some professional guidance. Beyond transferring the risks, they also want to transfer the “headache” associated with insurance documentation and the details of the insurance contracts.
Many of the reasons for distrust of insurance can be solved at the proposer form stage. Let us use motor, the commonest form of insurance. Like an “all risks” policy, many people who purchase comprehensive motor insurance policy ASSUME that all the risks associated with the ownership and usage of the vehicle have been taken care of. I capitalized ASSUME because many policy holders do not read the contract contained in the policy document. It the duty of the contact person (broker or marketer) to draw the attention of the policy holder to the potential landmines (exclusions and exceptions), so that he knows his limitations.

The policy holder should, for instance, be informed that in the event of a claim, even for a comprehensive motor policy, he will bear a portion of the claim, known as excess. He also needs to be told why after paying “so much” as premium for a comprehensive motor policy, he will still bear a portion of the loss. The contact person should let him know that the clause is inserted in the insurance contract to ensure that the policy holder takes reasonable care in maintaining and safe guarding the vehicle. The policy holder also needs to be further informed that he has the option of buying back the excess usually at one per cent of the insured value. The implication of the excess buyback is that in the event of a claim, the policy holder bears no part of the claim.  Read more

Culled from The Guardian