By Lawrence DANIELS (ACIIG)
Evolving at a break-neck pace due to strong competition and new policyholders’ needs, it becomes crucial to revise or update the insurance policy text or documents. In this regard, insurance companies need to update their policy documents to these current trends to remain relevant in the market. Here are some suggested considerations and steps to take in revising these documents to suit current trends
- Digital transformation: Digital transformation has devolved into a buzzword that resonates with every industry analyst, consultant and person who writes articles for the business section of any newspaper.
Despite its pervasiveness and multiple meanings, the core of digital transformation is relevant to almost any insurer on Earth. Hence, what the term implies is a constant and pressing reality for the vast majority, if not all, insurers around the globe – irrespective of the size of their operation, their corporate hierarchy, or the context and conditions under which they are working.
Digital presence facilitates fast and effective policy creation, claims management and customer service, which corresponds to the spirit of today’s society that wants things done in the shortest possible time. There is a necessity for further utilisation of online procedures for policy conveyance, claims and client interaction to correspond with the existing trend.
Regulatory changes: Insurance practice in Ghana is undergoing a revolution because of the very new regulations and standards set by the National Insurance Commission, Ghana Insurers Association and other key industry bodies such as the Chartered Insurance Institute of Ghana. The significant regulatory changes make it mandatory for insurers to be in compliance with new rules and standards to ensure transparency and win consumer confidence in upholding the trustworthiness of the industry.
The NIC frequently updates regulations that address emerging risks and enhance consumer protection, with the view of promoting fair practices in the conducting of insurance business. It is, therefore, incumbent upon the underwriter to keep pace with such changes and know what impact such changes have on the design of policies, processing claims and general operations.
The policy wordings shall be reviewed and revised from time to time in keeping with any new regulations or guidelines issued by NIC. It should include in a clear way the details of coverage, exclusions, procedures regarding the claims process and all other material information. This kind of clarity in policy wordings, therefore, will reduce the chances of misunderstanding and disputes and, thus, build up a better trust level on the part of policyholders.
Similarly, such interactions with bodies like the GIA and CIIG can also offer insight into best practices and emerging trends. More than often, such organisations offer the compliance and guidelines, with training resources, to aid insurers in maintaining compliance and continuously developing their services.
Simplify policy language: The terms of the policies have to be clearly spelt out in simple language, and the conditions written in simple language as well so that a common consumer would be able to understand. Technical jargon that may prove difficult for the policyholders to comprehend must be avoided.
To ensure that policyholders can easily understand insurance policies, it is essential to simplify the language used in policy documents. Simple, everyday language should be used instead of technical terms that might confuse policyholders.
Also words and phrases that are within the common understanding of the everyday person must be used. Terms that are specific to the insurance industry or that require specialised knowledge must be avoided. Legal terminology should be kept to a minimum, do not use terms that are outside the common understanding of the everyday person. When legal terminology is necessary, provide clear definitions or explanations in plain language.
Enhance digital accessibility:It is recommended that policy documents have to be readily accessible and available for download on the organisation’s websites and mobile applications. This allows policyholders and potential customers to easily access, review and understand their insurance policies at any time. Incorporate robust search functionality on websites and applications to help users quickly find the information they need. This includes searching for specific policy documents, FAQs or support articles. By enhancing digital accessibility, insurance companies can ensure that policyholders and potential customers have easy access to important information, which in turn promotes transparency, trust and financial inclusion.
Transparency and fairness: Ensure all policy documents clearly outline what is excluded from coverage. This helps to avoid misunderstandings and sets realistic expectations for policyholders. For instance, provide practical examples of scenarios where claims would not be paid. For instance, if a particular type of damage or incident is not covered, give a real-life example to illustrate this. This helps policyholders understand the exclusions better and see how they apply in real-world situations. Outline a transparent, step-by-step claims process.
This should include all necessary documentation, the steps involved from the initial claim submission to the final settlement, and any other relevant procedures. Providing this information helps policyholders know what to expect and reduces uncertainties during the claims process. Specify timelines for each stage of the claims process.
For example, details how long it typically takes to acknowledge a claim, investigate it, and make a decision. Clear timelines help build trust as policyholders can anticipate the duration of each phase and plan accordingly.
Inclusion of emerging risks
Cyber insurance: Given the increasing frequency and sophistication of cyber-attacks, it is crucial to offer insurance that covers cyber risks. This can include protection against data breaches, ransomware attacks and other cyber threats. Provide comprehensive details on what the cyber insurance covers. This might include costs associated with data recovery, legal fees, notification expenses and business interruption losses due to cyber incidents. For instance, offer scenarios illustrating how the cyber insurance would be applicable. For instance, explain how the policy would respond if a company’s customer data is stolen in a cyber-attack, covering costs like notifying affected customers, legal expenses and fines.
Pandemic coverage: Reflecting on the significant impact of the COVID-19 pandemic, it is important to include provisions for pandemic-related coverage.
This might involve business interruption insurance that covers losses due to pandemics, health insurance policies that explicitly address treatment costs for pandemic-related illnesses such as Acute Respiratory Distress Syndrome (ARDS) and Acute Respiratory Failure as well as travel insurance that includes coverage for pandemic-related cancellations. Clearly outline what is covered and what is excluded about pandemics.
This transparency helps avoid disputes and ensures policyholders understand their coverage. Provide clear examples of how the policy responds during a pandemic. For example, explain how a business interruption policy would cover a restaurant forced to close due to a government-mandated lockdown during a pandemic.
A revision of insurance policy documents in Ghana offers a good opportunity to improve customer satisfaction, enhance compliance and build a competitive edge within the existing insurance market. Simplification of the language, digital solution integration and covering emerging risks better serve the needs of the modern policyholder while building trust and transparency within the insurance sector.
