Redefining Future of Life Insurance

With the advent of e-payment systems in the country, the attitude of Nigerians towards savings became even poorer, leaving those still keen on savings with the option of life insurance policy as means of compulsory savings. Ebere Nwoji, in this report, highlights developments capable of diminishing this growing interest.

Insurance experts have often made the case that life insurance holds the future of insurance sector growth in Nigeria due to the fact that it is a line of business that affects everyone.

They further argued that as modern life insurance products are investment-related, the life insurance business line currently stands as the best avenue to compulsory savings for many Nigerians in the face of dwindling savings attitude of many people, which itself was the fallout of the advent of internet and mobile banking and a host of other e-payment systems.

In their view, despite its all-important nature, not many Nigerians have life insurance policies. Not even the group life insurance, which aside its compulsory nature as stipulated by the Pension Reform Act 2004 amended in 2014, offers different work groups the opportunity of securing their own group life or group accident insurance policy for their members.

From findings, it has been discovered that initially, one of the factors that scare members of the insuring public away from purchasing life policies is the fact that most of the policies mature at death, as such after spending their hard earned money to pay the premium for several years, the insured hardly benefits anything while alive rather all efforts are geared towards making provision for his dependents to benefit and keep life going after his death.

With this in mind, many people shun patronage of life insurance policies.

Indeed, many see putting in place life insurance arrangement as signing their death warrants, and as such give it the last consideration in their list of preferences.

Against this backdrop, in recent times, modern insurers have determined to redefine the face of life insurance policies to push to the market policies that give benefits to the insured at his life time as well as policies that are interest related to inspire people willing to save to patronise such policies.

Indeed, they have gone into earnest search for life products that will give the insured the opportunity of benefiting from the policy while still alive and even prevent him from dying from possible as well as policies that will improve on their financial well being especially at hard economic times.

Custodian LIfe Insurance Limited, was one of such firms as it came up with one of such much desired life policies that offers the insured the opportunity of benefiting from the policy while still alive.

The company, launched a product that will enable the insured conveniently seek for adequate medical treatment at home or abroad without turning himself and his household into public beggars in order to get funds for medical treatment.

The company, tagged the product "Custodian Critical illness insurance policy (CCIP)

The policy, which is the first of its kind in Nigeria, is for those suffering from critical and terminal illnesses such as stroke, cancer, heart attack and renal failures.

The company, which described the product as a standalone policy of its kind in Nigeria said launching the product was informed by the present economic, health difficulties in Nigeria to assist millions of Nigerians who were victims of the above illnesses address their health challenges.

Currently, the trend in Nigeria is to see people affected by these terminal sicknesses write to philanthropists, governments at all levels, civil society and humanitarian organisations through agents or non-governmental organisations for financial assistance to seek for medical attention outside Nigeria.

The amount often sought for by these unfortunate victims ranges from N10 million to N20million but sad enough, many of them give up the ghost before the money was made available by the donors.

A case in point was an Abuja-based veteran journalist and a staff of the defunct Financial Standard Newspaper, Mr. Benbright Mkpume, who was down with renal failure and begged for financial assistance from Nigerians to raise N20 million to enable him undergo kidney transplanting .

The unfortunate journalist begged for the said amount for two years but was unable to realise even half of the money before his eventual death.

There was also the case of the veteran comic-actor Moses Olaiya, better known as Baba Sala, who reportedly suffered a stroke and has sought help from Nigerians.

Media reports said that the octogenarian personally made the appeal at a briefing on his biography entitled 'The Triumph of Destiny'.

He was quoted to have said: "I need help. Nigerians should help me. I am not dead yet, they should not let me die suffering."

The comedian was reportedly looking frail and required human support to walk. Dele Adejumo, his son, was quoted as saying: "He has investments but they have all been wrecked by mismanagement. He also had a three-storey building in Mushin, Lagos, which he had to sell to offset debt incurred when his work, Orun Mooru, was pirated.

"We still have some of his recorded works not in public yet but machines that will be used to transform them to an acceptable format are not easily available. We do not have the kind of money they are charging us", said his son.

Another veteran actor, Sadiq Daba, was said to have been ill and he had lamented that it was very expensive to pay for his treatment.

Similarly, a number of Nollywood actors, journalists and other public figures had fallen victims of this ugly situation, some got instant help and are alive today while others could not and as such died just like that.

But often, insurance managers have said that such people need not beg to obtain medical treatment at home or abroad if they could put in place adequate insurance arrangement for the unknown and unforeseen.

Many Nigerians, often due to religious belief and culture wish away such sicknesses but this has not stopped them from affecting those they want to affect.

Custodian life insurance, in developing the critical illness insurance policy said

"We are well aware of the current economic, health difficulties in our country today for us at custodian insurance, tough times are for us to get tougher and not use the current climate as a negative block but rather an energising spring-board for new ideas. It is on the back of this that we have launched the critical illness insurance cover which we are confident will assist millions of Nigerians to address their health challenges, "said Larry Ademeso, Managing Director Custodian Life Insurance.

According to him, unlike the group life insurance policy which benefits are paid to dependents of the policy holder at his death, in the case of the critical illness insurance cover, the policy holder is six times more likely to claim under his critical illness cover than under the group life cover.

"Employers in Nigeria today are required by law to provide group life insurance cover for their employees, that is as far as the story goes , benefits will be paid to your beneficiaries when you would have passed away so what happens if you do not die but become incapacitated by some of the debilitating illnesses ravaging the populace this is why we developed the critical illness cover to meet the yearnings of Nigerians".

According to the Custodian Life insurance boss, the custodian Critical illness cover, offers the policy holder added protection and confidence boost to go about his daily activities without fear of possible financial backslash associated with treating a critical illness.

He quoted the World Health Organisation as saying that Nigeria has the highest cancer rate in Africa while there is increasing precedence of stroke just as about 10 percent of adult Nigerian population is liable to have heart attack.

Similarly, Anchor Insurance Company Limited recently launched its innovative and unique life insurance product tagged Anchor Loss of Employment Insurance scheme, popularly refers to as AnchorLoEIS.

The Chairman, Board of Directors, Anchor Insurance Company Limited, Dr. Elijah Akpan, at the event in Lagos which attracted captain of industries, Bank Chiefs, co-operative unions, insurance practitioners, insurance brokers, employers of labour, employees and the insuring public, revealed that in launching the product, the company targeted at addressing a real kitchen table issue for families all across Nigeria.

"We have an opportunity and a responsibility to innovate and create an insurance scheme to protect employees' employment income and in doing so to provide a measure of financial stability to millions of Nigerians who may be laid off in the most difficult economic time.

"We have the opportunity and the responsibility as an organisation to provide peace of mind to families who may be left in the ditch without a job and nowhere else to turn to," he stated.

Also Wapic Insurance Plc, now Coronation Insurance plc, had championed the course of encouraging Nigerians to cultivate good savings culture with its array of SMART Products targeted at not only giving competitive interest rate to consumers but also offering free life insurance cover to savers.

The management of the company, explaining how savings through the company's various smart products work stated: "So here's how it works; you want to save towards a short term goal, you choose the plan that works for you depending on your need. An account is then created for you and you save monthly. Now for the period of your plan you have life insurance cover!"

Other life insurance firms have developed series of investment related products that matures at the life time of the policy buyers and agents of various insurance firms marketing these products testify of increasing rate of buyers of these products proving that the future of insurance business is in life.

But the agents lamented that poor attitude of some insurers toward settling claims from these life policies leaves much to be desired creating fears of possible dwindling of this rising interest in life insurance business.

One of the agents working with a mega insurance firm in Lagos said she was personally disappointed at the behaviours of management of insurance firms towards claims from policies they sold to the public.

According to the agent, she prevailed on a cousin of hers to patronised her company by buying an investment related policy from the company through her.

She said her disappointment set in when the policy matured after three years and when the policyholder demanded to take back her money and the proceed as the contract was interest related, her company delayed the claims payment for more than six months and when eventually it was paid, the client could not get exactly his savings let alone the interest.

She said when the client questioned why his complete entitlement wasn't paid, he was pointed to a clause in the policy document that explains why she could not have her money complete but was told that she gained free life insurance cover attached to the policy.

Another case in point was a journalist who insured all his working tools against theft with one of the big firms located in Ikoyi area of Lagos.

On his way back from work one day, he was attacked by hoodlums who collected all his working tools including IPad, phones, camera, all of which he took insurance cover on. When the journalist filed his claims, the insurer pointed out a clause in the policy that could not accommodate the claims because the incident happened due to his carelessness of working in the late night with those working tools.

Surprise enough, insurers from western world markets often used as reference point when talking about places where insurance works are not immune from this strange behavior towards claims settlement.

Participants in the Spanish and Portuguese leg or of European Risk Frontiers survey on claims payment by insurers have this to say concerning claims handling by insurers in these countries.

"We have noticed, as a rule, a change in claims management processes, although not in all segments, nor by all insurers. Claims settlement has become slower and more complicated," said Lourdes Freiria, director of risk and insurance at Grupo San José.

"The biggest disagreements have been sparked by some clauses being interpreted in a way that is more restrictive than they were in previous years, even though the same typology of the losses and the same clauses are applied. I hope that this is not something that will get even worse, as the provision of adequate answers to claims is the reason why insurance exists, and that should never be questioned," she added.

David González, chief insurance officer at construction group Sacyr, agreed that the hardening market has "complicated" claims.

"We have seen longer claim settlement processes and ever more strictness in the adjustment of losses. On some occasions, there have been more tensions with insurers to solve a claim. It is true that there have been more conflicts and disagreements in the market, and that generates tension. From this point of view, relationships have changed in the market," he added.

But claims are not the only concern for buyers in the current market. Luis Campilho, insurance manager at engineering services group Efacec, pointed out that even day-to-day interactions seem to be getting more laborious.

"We have noticed that the time it takes for insurers to answer our requests has worsened significantly of late, and especially in 2021," he said. "In one particular case, the issuance of a simple document linked to a policy, which would usually take one or two weeks, took more than 45 days to be delivered by the insurer. Even the underwriting process is taking significantly longer than usual."

A Nigerian broker told THISDAY that what often causes this problem is the use of university graduates who know nothing about insurance in selling insurance products.

He said these graduates are given targets by their insurance firms which they must meet every month.

He said in a bid to meet these targets, they promise insurance buyers what the policy they sold to them could not deliver when Claim occurs.

He said when there is claim and core insurance underwriters begin to interpret the terms of the contract, the client would become confused and will assume that insurance firm has duped him.

He however said the Chartered Insurance Institute of Nigeria is on top of the problem through compulsory training for anybody that wants to sell insurance.

Industry observers viewed that since non-payment of claims was main reason many Nigerians jettison insurance a problem which has taken present managers decades to solve, management of insurance firms engaging in this hide and seek game when life insurance contracts matures should desist from such image tarnishing behaviors.

They insisted that they should live up to the principle of utmost good fate which is a tripod on which insurance contract stands.

They also opined that graduate marketers of insurance products should be well informed and trained to tell the buyers the exact scope of coverage of the product they sell and not to make bogus promises that were not enshrined in the policy contract just for the purpose of selling policies and meeting their targets.