Cedric Stephens The notion of insurance abuse
Memphis and Graceland were part of the backdrop to one of Paul Simon’s popular songs. The lyrics, which were written in 1986, reportedly after the failure of the writer’s marriage, explore his thoughts while he was on a road trip to visit the house in which Elvis Pressley once lived.
Graceland, the song title, and the name of the house were on my mind as I began a 40-minute conversation with a resident of the state of Tennessee a few days ago. Our discussions occurred after many interactions between that individual and three Jamaica-based insurance entities.
The subject line of our email exchange was ‘Insurance abuse in Jamaica’. The choice of the phrase ‘insurance abuse’ was new to me. Abuse, according to one source, is a repeated action that intentionally causes harm or injures another person. The more common types of abuse are physical, verbal, and sexual.
I have never previously read anything that suggested the poor treatment of insurance customers equated with abuse before my virtual trip to Tennessee. My investigations led me to the Social Care Institute of Excellence in England or SCIE – https://www.scie.org.uk/safeguarding/adults/. It listed 10 different types of abuse. Organisational or institutional abuse was one. Insurance abuse can, therefore, be said to be one subgroup.
SCIE identified 17 signs or indicators of organisational or institutional abuse. Nearly half of them are symptoms of poor service generally and can be applied to members of the insurance industry. They are:
o Authoritarian management or rigid regimes;
o Lack of leadership and supervision;
o Insufficient staff or high staff turnover resulting in poor service quality;
o Abusive and disrespectful attitudes towards customers;
o Lack of respect for the dignity and privacy of customers;
o Failure to respond to allegations of abuse appropriately;
o Failure to respond to oral or written communication on a timely basis; and
o Failure to develop an efficient system to respond to complaints.
Donovan Wignall, president of the MSME Alliance, agrees with the concerns and characterisation of the service problem described by my informant. He believes, according to the Jamaica Observer, that there is a “general customer service crisis affecting the country. Urgent redress is seriously needed if businesses are to move forward with efficiency”. Through the Small Business Association of Jamaica, which comprises a large cross-section of small businesses, its members are now actively championing the need for better customer service in the banking sector.
COVID-19 pushed a number of these institutions to digital, and in some cases, cutting back staff levels, the results have been far from satisfactory for many bank clients.
“If you have a problem,” he says, “it may take the banks hours, days, and even months to sort out issues, and even when you try to call them, this is still a problem as sometimes the phones go unanswered.”
The handling of the Taneka Gardner issue – which was the subject of my August 28 article Why the Secrecy and Delay in the Life Claim? – is an example of organisational or insurance abuse. The insurance regulator’s February 2019 Market Conduct Guidelines for Insurance Companies and Intermediaries seeks to outlaw the practice of insurance abuse. These rules are invariably ignored.
Dr Mark Jamison is the director and Gerald Gunter the memorial professor of the Public Utility Research Center of the University of Florida. In a publication marking the 25th anniversary of the Office of Utilities Regulation, he described that institution as ‘world class’. This entity was certified as having met the requirements of the International Standards Organization Quality Management Standard, ISO 9001, in 2015.
Below is an extract from an article that I wrote for another publication earlier this year:
“There is anecdotal evidence to suggest that decades ago, a former minister of finance inserted himself in what was a ‘technical’ matter involving the quality and delivery of insurance services during an election cycle. He was said to have orchestrated the removal of the Office of the Superintendent of Insurance’s (the insurance regulator) chief technical officer. Those actions can be contrasted with the response of the former head of the OUR who, according to the Privy Council, in its January 20, 2010, judgment, Mossel (Jamaica) Ltd (T/a Digicel) V Office of Utilities Regulations, Cable & Wireless Jamaica Ltd, Centennial Jamaica Ltd, resisted the attempts of the portfolio minister to ’emasculate the OUR’s statutory function’ (Page 17). The OUR’s leadership team provided an excellent example of commitment to its mission.”
The OUR is also committed to improving how utility providers serve customers. It implements objective measures to prevent the abuse of customers. Annual surveys are conducted “to measure the current level of customer service, in-store, call centre, online on social media platforms about service quality, customer experience, the level of improvement and the overall customer rating”. To my knowledge, there is nothing remotely resembling these criteria in the insurance regulator’s guidelines or being practised by insurance service providers.
Some people have interpreted Simon as trying to use the famous road trip to give himself solace, peace, and comfort from the pain he felt after the end of his one-year marriage to American actress Carrie Fisher.
My virtual trip to Tennessee has provided me with fresh insights into a problem that I have been writing about for many years. I hope that it will do the same for at least one insurance company CEO and/or the head of the insurance regulator.
Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to aegis@flowja.com or business@gleanerjm.com.