If my memory serves me right, I think it is about four weeks ago that I heard on radio the voice of an insurance expert explaining some of the intricate problems confronting the industry in Ghana.
I was particularly drawn to the comments made by the expert about “insurance cheats”, that is, those who try to cheat on claims by making false statements to get indemnified. In fact, I was shocked to hear about the professionals he mentioned as part of those who would like to make false claims given the opportunity.
Well, if you are an ardent reader of this column you would have noticed that l am a strong advocate for insurance because it gives the comfort and the peace of mind you need to go about your daily activities.
Given my interest in insurance adoption, I was worried when l heard that some well-respected professionals would like to cheat the system. Of course, this is not new at all, and not just a Ghanaian problem. Globally, both consumers and providers of insurance policies have had concerns with fraud, cheating and mis-selling.
Notable companies of global repute have faced several millions of fines from regulators for mis-selling of insurance products, and individuals and firms have been fined or have faced criminal prosecutions for making false claims. Yes, criminal prosecutions.
Criminal prosecution, actually, is the reason why l wouldn’t recommend cheating in your insurance claims, aside from the strong moral reasons that make the action anti-social. Look, insurance is actually a pool of risk, in which those who actually suffer losses are compensated. The premium you pay, which is determined by either a sum assured over the life of a policy is actually a very small fraction of what you actually receive as claim when you suffer the unexpected.
When you make a claim on your insurance company the claim is respected within the provisions of the policy document. What this means is that you can only claim on what you have insured and paid the right premium for. So, ensure that you read the blueprint well and cover all intended risks to be covered so that you don’t get disappointed when you make a claim.
Worryingly, despite all the benefits of insurance, according to the National Insurance Commission, penetration is still low. What this means is that per population, the number of people who are taking up insurance policies is still not encouraging. This is not good enough, and if you are in that category you may have to reconsider your decision.
To encourage you further, l would like to draw your attention to the June 12, 2015 edition of this column, which had the headline: “Insure against risk?” This was a piece l wrote with a lot of sadness in my heart because it was just a few days after the Black Wednesday, that faithful June 3, 2015 when heavy flooding and fire led to the loss of lives and property here in Accra.
This is how I started the June 12, 2015 edition: “The image beamed on television sets was grim and the story telling indeed. Yes, for the first time, to many, water seemed unable to quench a raging fire; or at least control it to an extent! Rather, it was the water that was on fire…literally. What played out to ironical thoughts and confused minds was a scene of fire in a sea of water. Yes, the water was on fire! Many may have certainly wondered”.
This Black Wednesday will forever remain in the memory of most people for years to come. This was the day - need l remind you - that amidst torrential rain, an explosion at a fuel station provided more than a warming comfort to the many that had gathered there, perhaps wet and waiting for the rain to subside and others trapped in their homes because of the adverse weather conditions outside. Picture the case of either staying in your home to get drowned or stepping outside to face a serious blaze. That indeed was the picture of many of the dead, those who unfortunately are not around to tell their own story. May their gentle souls continue to rest in perfect peace. Amen.
Now, there is also one thing that kept me up when the news broke about the havoc- how would those who survived the inferno recover from the loss. Beyond the dead, I wondered how those who had survived the disaster but lost so much property were going to survive if they had no insurance cover because when you have an insurance cover you get “restored” when you suffer a misfortune.
Dealing with my saddened heart, this is what I wrote in the June 15, 2015 edition: “Truth is, on the whole, we aren’t very good at assessing risk. Houses in certain parts of the country are affected by natural events such as earthquakes and even though the government might try to offer significant help in making these houses “safe”, many of their owners discount the danger and refuse help.
The fact is, we seem to assess risk not in terms of probabilities but in terms of whether we can imagine an event actually occurring in our life. For instance, a ‘burning water’ may appear impossible to the uninformed but science says it is possible as the chemical composition of petroleum products can force the water to ‘sit’ forcing the fuel up instead. That is exactly what caused the fire that has forced the country into mourning. [Of course] insurance couldn’t have prevented the situation anyway but at least it can assuage the pain of those affected”.
In fact, personal attitudes of individuals play a part in their interpretation of risk tables of probabilities. A car accident (with the right policy though) or the loss of possessions should not be troubling too much if you have an insurance policy, suffice it to say also that insurance companies are not bottomless pits of money to provide recompense.
Insurance companies give you peace of mind by helping you to mitigate your risk - possibility of occurrence but cannot be determined with absolute certainty. Often times, the good insurance companies do it so well.
For instance, insurance companies will deal with their own risk (what they have taken away from you) by also paying a premium to other insurers (called reinsurers) to assume part of the risk. So, you see, in all ways, it pays to insure against risk! But, you can also give insurance companies peace of mind by not cheating on claims.
By Bernard Otabil