In a world filled with uncertainty, insurance has become an indispensable necessity for individuals and businesses alike.
While insurance policies provide a sense of security and protection, the Insurance and Pensions Commission (Ipec) has identified a challenge that plagues the industry — customer service.
With the aim of improving the experience for policyholders, the commission has called upon regulated entities to ensure that customers receive the service they deserve, as outlined in their policy documents.
“Customer service remains a challenge in the industry and the commission encourages all regulated entities to ensure that policyholders get the service as per agreement summarised in the policy documents,” reads Ipec’s report for the quarter ended March 31, 2023.
“The commission reiterates the need for the industry to embrace treating customers fairly to facilitate trust and confidence in the industry.”
During the first quarter of this year, the commission received a total of 28 complaints against short-term insurance companies.
The most significant concern voiced by policyholders was the delay in the settlement of claims, which accounted for a staggering 50% of the complaints.
Imagine the frustration of individuals trying to rebuild their lives after an unfortunate event, only to be met with unnecessary delays in receiving the financial support they desperately need.
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Additionally, unsatisfactory service and repudiations constituted 11% and 39% of the complaints, respectively, highlighting the need for a complete overhaul in the way insurance companies interact with their valued customers.
“The commission continues to underscore the need for insurers to settle claims within agreed timeframes to protect claimants from loss of value,” the report reads.
“Treating customers fairly is important for building sector reputation as such players should strive for fair treatment of their policyholders. Insurers should also embrace treating customers fairly.”
For the quarter under review, about 64% of the complaints were against three entities — Econet, Champions and Zimnat Lion Insurance with 39,29%, 14,29%, and 10,71%, respectively. The other 35,71% of the complaints were against the remaining short-term entities.
Life assurance-related complaints were another area of concern, with the commission receiving 25 grievances.
A whopping 72% of these complaints were attributed to unsatisfactory service, leaving policyholders feeling neglected and unheard.
Those related to the commission of inquiry constituted 12%, while non-payment of benefits and delay in settlement constituted 8% each.
Fidelity Life had the highest number of complaints, accounting for 24%, followed by ZB Life and First Mutual Life, each at 16%, while Econet constituted 12%, Doves and Zimnat Life at 8% each and four entities namely Old Mutual Life, Doves, Nhaka Life, Nyaradzo Life and Universal Life were all at 4%.
In the pension sector, of the 37 complaints received, 14 of them were resolved, 23 are still in progress, 3 of the complaints for unpaid benefits were for funds which are under dissolution whilst two were pre-2009 loss of value related complaints.
“The unpaid benefits complaints can only be closed once we get the confirmation from the complainant of receipt of funds, but at times people forget to update the commission, therefore more follow ups are required from the commission,” Ipec said.
The report indicates that most of the complaints reported were under insured funds with 27 complaints, these accounted for 73% of all received complaints. Standalone funds had six complaints whilst self-administered funds had four complaints.
First Mutual Life had the highest number of complaints with 14 complaints and 10 of these were for unpaid benefits. Old Mutual Life Assurance had the second highest complaints with eight complaints, five of which were for unpaid benefits as well.
“Most of the complaints received during the quarter were for unpaid benefits, accounting for 65% of all complaints received,” Ipec noted.
“They were followed by 2019 currency reform complaints accounting for 11% of the total complaints received and the nature of complaints with the 3rd highest number were for 2009 Commission of Inquiry, accounting for 8% of the total complaints received.”
The commission said it received one funeral assurance-related complaint. This complaint, which was due to the unsatisfactory service offered by the funeral assurer in question, was still outstanding at the end of the quarter, it said.
“The commission also urges sector players to offer relevant products that address the needs of the insuring public.
“Funeral assurers should also have in place reassurance arrangements as a risk management Tool to manage loss experiences.
“The commission underscores the importance of the timeous settlement of all valid claims.”
To overcome these challenges, insurance experts encouraged regulated entities to implement measures that prioritise policyholder satisfaction.
Streamlining claims settlement processes, reducing bureaucracy, and providing regular updates to policyholders are just a few steps that can significantly improve customer experience.
Additionally, experts say comprehensive training programmes for insurance agents and staff can enhance their ability to handle inquiries effectively and provide the necessary support to policyholders.
