Insurers' Failure to Know Motor Insurance Customers Leads to Premium Losses

Insurance companies are facing substantial premium losses due to their inability to effectively understand their motor insurance customers, as reported by Inspenonline.

Experts emphasize that possessing comprehensive data on motor insurance policyholders would allow insurers to directly communicate with them and cross-sell additional policies, thereby increasing premium earnings.

Expressing concern over the lack of trust between insurers and their intermediaries such as brokers and agents, experts highlight the prevalence of data hoarding, resulting in dissatisfaction among most motorists who feel disconnected from their insurers.

Despite guidelines mandating insurers to remind policyholders of renewal six months before expiration, this task remains unfulfilled due to insufficient data on the policyholders.

The experts argue that accessing the 3.11 million motor policies cataloged on the Nigerian Insurance Industry Database (NIID) would empower insurers to offer additional insurance products to vehicle owners. They suggest that identifying motorists with only third-party cover could facilitate the marketing of personal accident policies, as their current coverage doesn't adequately protect them.

Furthermore, experts believe that having complete data on motor insurance policyholders would enhance after-sales services and foster better relationships between insurers and policyholders. They call on the National Insurance Commission (NAICOM) to address the distrust between insurers and intermediaries and urge insurers to adhere to the Know-Your-Customer (KYC) policy.

Moreover, experts recommend that insurers should engage with policyholders on special occasions such as birthdays, Christmas, New Year, and other significant events, similar to practices in the banking sector. They also advocate for the dissemination of insurance education tips to policyholders via their contact information to boost awareness about insurance.