A recent study of the insurance industry in Uganda has uncovered issues with customer satisfaction. The study, conducted by the Insurance Regulatory Authority (IRA) through a Policyholder Satisfaction Survey, found that between 33% and 42% of current insurance policyholders are not satisfied with the service they receive.
Customer satisfaction levels vary among insurance companies and depend on the type of policy held. The primary complaints revolve around claim settlement. Some customers have experienced significant frustration, leading them to abandon claims that were due for processing.
For instance, one policyholder received a lapse notice for missing monthly premium payments. Despite contacting the insurance agent for clarification, they received no response. When they visited the company in person, they were redirected to the agent. Only after lodging a complaint with the Insurance Regulatory Authority (IRA) did the issue get resolved, with the Authority’s intervention resulting in a premium refund.
Another policyholder had their claim approved but faced a lengthy and cumbersome process to obtain the necessary discharge voucher and receive their payment, taking a total of 29 days.
Ibrahim Kaddunabbi Lubega, the CEO of IRA, expressed concern about insurance companies that tarnish the industry’s reputation. The study also revealed that potential customers often do not receive vital information during the policy enrollment process. Agents rush through sales processes to meet targets, leaving policyholders uninformed about the policies they are purchasing.
Haj Kaddunabbi highlighted that this practice stems from sales agents being pressured to achieve sales targets, leaving little time to explain policies to prospective policyholders.
The report also pointed out cases where customers faced difficulties modifying their policies, such as extending the policy period or changing payment schedules. In one instance, a policyholder lost their savings because the insurer insisted on clearing arrears before making any changes.
The report emphasizes the need for insurance companies to adapt to an increasingly informed society that is aware of its legal rights.
One client was told to change hospitals because the first facility required insurer approval for a specific medical procedure. This raised concerns about insurers assuming a specialized role in healthcare decision-making.
The CEO urged insurance companies to consider the impact of their decisions on customers and their long-term business prospects.
The report’s findings show that 77% of respondents were satisfied with premium payments and customer care services. However, communication and claims handling received 68% approval, while complaint resolutions lagged at 52%.
Factors influencing customer satisfaction, according to Lubega, include reasonable pricing, efficient claims management, competent staff, policy relevance, transparency in terms and conditions, convenience, and reliability. Discrepancies between advertising claims and claim outcomes, delayed payments, lack of updates, and premium receipt notifications can lead to customer dissatisfaction.
Other factors include flexibility in premium payments, knowledge of policy benefits and rights, responsiveness to queries, bureaucratic service delivery, and unexplained policy terms.
The study, involving 384 policyholders with 298 responses, aims to assess public perceptions of the insurance sector and identify areas for improvement in service delivery.