Globally, but even more prominently in developing countries, insurance companies do ignore their customers, undervalue them, shy away from answering strategic questions and solving crucial problems. They also in most cases stand by unreasonable policies, which they could easily amend and many don’t keep their words when policy holders are demanding for their claims within the agreed terms and conditions.Beyond these, insurance firms are failing in strategic communication of their life and non-life policies. Here, we analyse rationales behind low patronage of insurance products and services using Nigeria as a case.
Failure to communicate strategically
Insurance brands like other financial services firms revolve around three key elements; deeds, processes and performances. Customers want products or services that would satisfy them beyond surface claims. Hence, the need to communicate varied attributes associated with both life and non-life policies through integrated communication channels. Apart from this, insurers must be ready to spread unique values of their brands at the right time with the right message.
For instance, a recent study showed that word of mouth and television are the media that engages customers the most, while action, message, caption and images of both electronic and print media attract the customers most. The study also discovered that advertisements with appropriate messages and details influence a potential customer in buying insurance products.
No doubt, with the advent of new media, it has become imperative for insurers to employ integrated communication channels that include call centers, mobile advertisements, and websites. This is necessary because the change in the industry has been both behavioural and attitudinal in nature, and is more prominent among younger customers. Customers currently use the internet primarily to research and compare various policies, view policy details, make policy changes, pay premium bills, and contact agents/brokers. According to experts, this would lead to adequate client contact and feedback.
The assumption that people and corporate establishments would buy policies because there are extant laws, which compel them to do, are no longer tenable, especially for the non-working population. Some established insurers believe that they have the reputation. To them, this is enough to build loyalty whereas their counterparts in advanced countries such as UK and US are asking their customers how satisfied or dissatisfied are they about products rendered to them daily.
In Lagos state, about 60% of policyholders do not trust their insurance companies while 17.1 percent of those who have suffered a loss or damage in the past would not file claims because they do not think their insurance company would be transparent in the dealings.
Poor customer relationship management
Customers want to derive premium claims from the policies they bought whereas insurers are capitalizing on keeping the policies forever. It is simple, keeping policies could not retain customers. In a strategic way, consumers want more frequent, meaningful and personalized communications delivered through a customized approach with tailored information.
In summary, the huge market opportunity in the Nigerian insurance market can be better explored through customer delight/satisfaction approach. In a country of 170million people and barely 0.5% insurance penetration; transparency, integrity and first rated customer service seem to be the driving force to tap into the goldmine within this sector.