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Insurance industry players have been urged to improve service quality, especially in areas of customer care, communication channels, claims payment and complaints management to increase insurance uptake.

The appeal was made by the Insurance Regulatory Authority of Uganda Chief Executive Officer, Alhaj Kaddunabbi Ibrahim Lubega during the 57th CEOs breakfast meeting held at Kampala Serena Hotel recently to share findings of the Policyholders Satisfaction Survey, 2023.

He noted that while the popular law of demand and supply proves that demand for a product rises with a decrease in price and vice versa, providing a great customer experience has become more important for a business to thrive than price and product.

The study sought to ascertain the levels of satisfaction among insurance policyholders in Uganda, identify key drivers of satisfaction and challenges policyholders face in accessing insurance services.

IRA CEO – Alhaj Kaddunabbi Ibrahim Lubega

It assessed customer satisfaction in respect of mode of premium payment, nature and range of insurance products provided, claims handling processes and complaints handling.

The numbers

The findings revealed that 77% of customers were satisfied with the premium payment process, 72% with customer services, 68% with communication from insurers, 68% with claims handling while 52% were satisfied with complaints resolution.

Alhaj Kaddunabbi, however, urged players to work towards achieving a satisfaction rate of above 90% in each of the parameters to improve customer satisfaction so as to increase insurance uptake and boost their companies’ revenues.

Quoting Super Office, a leading supplier of business-to-business customer relationship management software, Alhaj Kaddunabbi noted that business revenue can go almost double in 36 months if customer experience is improved to a satisfactory level.

Making reference to American Express, an American multinational financial services corporation, Alhaj Kaddunabbi further noted that consumers are willing to spend 17% more on a company that provides outstanding customer service while 93% of customers, according to Hubspot, a leading Software developer & vendor, are likely to make repeat purchases with companies that offer excellent customer service.

Additionally, he said that 91% of customers unhappy with a brand will leave the without even complaining while 34% of the time, customers switch brands because they are dissatisfied with customer service.

The survey, thus recommended that insurers rethink claims payment not just a contractual obligation but as a business growth and sustainability strategy, coordinate expectations and ensure that customers understand their policies.

“Customers expect the amount of money they receive should accurately reflect their loss. If the amount they are awarded is too low, they will not walk away satisfied, even if the process was quick and smooth,” Alhaj Kaddunabbi said.

Insurers were also advised to consider short-term policies that cover periods shorter than five years for life insurance policies to cater for individuals who are working on short terms contracts and also provide monthly/annual statements to insurance policyholders

Additionally, they urged to should streamline complaint and customer care desks to expeditiously handle policyholders’ complaints.

The survey sampled 384 policyholders, out of 204,598 policyholders, and got a 74% response rate.

Satisfaction/dissatisfaction drivers

Among the cited drivers of product satisfaction were reasonable pricing, efficiency in claims management, adequacy of customer-facing staff in terms of technical knowledge and expertise and relevance of products/solutions to the needs and conditions of the customers.

The others were ease and extent of appreciation of the product’s terms and conditions, convenience and reliability, simplicity, response time and personalisation.

The drivers of dissatisfaction on the other hand were ddiscrepancy between the information presented in advertising and other sales efforts and the facts that emerge during claims/mis-selling, delayed and nonpayment of claim and failure by insurers to provide monthly/annual updates.

The others are lack of notification of premium receipt, limited knowledge about policyholders’ benefits and rights, poor record keeping/reconciliation standoffs, poor response time to queries, inflexible payment plans, complex Terms & Conditions/ complex language, unexplained policy terms, bureaucracies in service delivery and inflexible working hours, especially in the case of medical insurance.

The IRA Director Planning, Research and Market Development, Mr. Protazio Sande said that reviewing services and solutions based on customer input is fundamental to improving one’s business;

“The voice of customers is a valuable asset. Customer satisfaction plays an important role within any business, but even much more in the service sector such as the insurance industry,” Mr. Sande said.

He added: “Customer satisfaction is the leading driver of customer loyalty; it is way to identify unhappy customers, reduce churn and increase repeated purchases.”