Is Insurance Only Concerned With Claims?

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Many more people are talking about insurance these days, and they want to know how insurance firms would handle rising claims following the thoughtless damage of private and public property by uninsured Nigerian demonstrators.

No one appears to care about those who didn’t have insurance, not even the insurers who could now be able to cover them; every outlet is focused on claims.

What Is Insurance If There Aren’t Any Claims?

Numerous individuals and corporations have had insurance policies for many years, paid their payments on time, but have never submitted a claim to their insurers.

They’ve termed their experiences as “excellent,” and their insurers have referred to them as “very good,” wishing that all of their customers were like them. “What is the point of getting something and not using it?” would be a better question. “Would you realise the value of what you have if you didn’t use it?” or “Would you know the value of what you have if you didn’t use

Customers (policyholders) with only a rudimentary comprehension of insurance’s concept and principles have constantly and progressively complained to the insurance system about not receiving any benefits after the year(s) of no claims. The simple response is that you have been contributing to the relief of another policyholder who has made a claim, and you never know when it will be your turn!

The enquirers are frequently given more information, but they are left wondering if it makes financial sense. Only claimants who receive fast payment of their claims understand the value of insurance and can look forward to the future with confidence.

Claim-Making As A Marketing Tool

Insurers utilised the term “No Claims Discount (NCD)” to urge customers to stay loyal to them in the past, but unhealthy and unethical methods have since obliterated it from marketing and sales debates both within and beyond the insurance industry.

I’ll clarify what NCD implies for people who don’t know what it means:

If you sought cover for your vehicle in Nigeria until 23 years ago, the insurance company representative would tell you that after your first year as a policyholder without any reports of damage or loss, you would be entitled to 10% No Claims Discount when you renewed for the second year; 20% the following year, 33.3 percent, 40%, and as you enter the sixth year of your relationship, you would be entitled to 50% NCD!

So, if your premium was N200,000 at the start, after five years of continuous insurance with an insurer without a claim, your premium would have dropped to N100,000, assuming the vehicle’s value remained constant, which was improbable because insurers would insist on proper coverage.

When you consider that today’s market practice is for ALL insurance companies’ sales representatives to offer you a rate or price that is equivalent to what was given to a policyholder who had been loyal to an insurer for six years, you can see why claim payment remains a critical part of insurance discussions.

In Nigeria, policyholders’ loyalty to insurance firms is uncommon and frequently impossible to achieve because pricing, not claims payment, determines which company obtains the contract.

What We’ve Learned from the Protesters’ Claims

As the debate over the claims that resulted from the violent protests continues, both insurers and policyholders are learning the painful lessons of sacrificing future rewards for short-term profits.

The “competitive” rates offered by insurers to lure naive policyholders to their side did not account for the expected number of claims payouts, thus many insurers are chewing their nails over their poor aggressive judgments.

The policyholders, on the other hand, will disregard whatever understanding they had at the time of the policy’s creation and seek a settlement of the claims as the rest of the world demands.

When insurers perceive that they are going to lose and the policyholder is going to win, they will start making arguments that are generally inconceivable to industry observers, and you can’t blame them since shareholders aren’t willing to wait another year for a return on their investments.

My organization had had a customer who requested a “no claim” coverage to satisfy a financial institution’s criteria. It was unexpectedly accepted. The customer sustained a significant loss due to a fire shortly before the policy expired, but was unable to contact us, and we never learned how the issues were resolved; in the meantime, the customer’s business has since ceased to exist.

Yes, insurance is all about claims because when policyholders are paid quickly, they can get back to work, keep their employees employed, and save their families while the government reaps the benefits of tax money.

Delays and denials of claims have resulted in financial troubles that the insurance sector could not have predicted and that the government, which is tasked with reducing poverty, is wholly unaware of.

Non-payment of settled claims has become the (dis)ease of doing business with the insurance industry in Nigeria, and the ostensible obstacles posed by these protesters’ claims are opportunities to correct a long-held misconception.

The strongest indicator that the insurance business is ready to expand is the ease with which claims are processed.

This is the time to learn more about insurance claims, the component of the business that either persuades or perplexes buyers and policyholders.

Only by filing claims can you determine whether or not your insurance policy is valid.

The coming days will determine whether the sector lives up to its name or faces efforts to replace it.

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