The Pain of Being an Insurance Customer in Kenya

By March 5, 2019 Evolve Insights

As it appeared in the Daily Nation on March 5th 2019
Dr. Lucy Kiruthu

The Insurance Regulatory Authority recently launched the 2018-2022 Strategic Plan. One of the outcomes of the plan is to increase the Treating Customers Fairly (TCF) index from 70% to 100%. Every insurance services customer has a story to tell. These stories may be of a fair or unfair treatment. The stories may be of an aggressive sales agent, a mishandled policy renewal, a delayed claim’s settlement or a financial loss prevented through insurance. These stories paint a picture of an insurance industry that has supported customers mitigate risk as well as an industry that has caused some painful moments. What is your story as an insurance services customer? Have insurance companies treated you fairly?

Insurance products and services are diverse and unique. Most customers do not seem to fully understand insurance. As a result, there is lots of misinformation about insurance. Furthermore, most insurance companies, brokers, agents and others involved in the insurance process do not seem to proactively inspire customer loyalty. Within the industry, customer experience is yet to become a key differentiator. This is despite the fact that switching cost between insurance providers is almost zero. Even the industry as a whole does not seem to abide by some minimum service standards. As such, there are certain pains we feel because of being Insurance customers.

On-boarding, renewal and claims or policy maturity are the most important journeys for an insurance customer. Most insurance sales staff have an interesting approach when selling insurance, all they need is a signature and payment. During the on-boarding process, policy information is most often shared in small print. Many customers do not quite understand the kind of risks covered. Furthermore, most insurance companies do not bother to explain the policy details to their customers. Many insurance customers are therefore often left in the dark. This is a major source of pain in case of a claim or at exit. Is there a lack of transparency on policy information?

Another major pain point for insurance customers is the claim process. Most insurance customers are happy until there is a claim. Insurance companies do not settle a claim unless they are fully satisfied. In most cases, customers are unaware of the process. Some do not know what to do in case of an accident, a medical situation or other major disasters for which there is an insurance policy. I recall once trying to start a claims process; I just gave up and got the car repairs done. Why are insurance companies not educating their policyholders on their processes? Is there a lack of trust?

Businesses that offer great customer experiences grow faster. The insurance industry needs to improve customer experience from start to end. Individual insurance companies must invest more in minimizing the pain points and improving overall customer experience. In particular, there is need for the policy information to be explained and claim process simplified and made painless. Insurance companies must gain deep customer insights. Where possible, they need to use digital technology to track interactions with customers in real time. I believe that by focusing on the customer, insurers will build customer trust and increase penetration in Kenya.

Dr. Lucy Kiruthu is a Management Consultant and Trainer. Connect via twitter @KiruthuLucy

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