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What To Look Out for in Choosing Your Insurance Company

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What To Look Out for in Choosing Your Insurance Company

After all is said and done, the buyer need not suffer from buyer’s remorse. This incident should not happen in finance circles where trust is key in every transaction. Some financial providers’ regrettably renege on their promises; others overpromise and yet still some get liquidated and fold up. Insurance, one of the main fulcrums in finance, is not spared under this debacle. Some of the key considerations in choosing an Insurance company to deal with can be found below:

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Good customer service.

Without the patronage of the customer, the insurance company ceases to exist. The customer ought to be satisfied beyond their expectations. Some key things a customer should look out for could be; Are the policies explained to you? Are you served on time; whether on phone or in person? Are you been reminded of your renewal dates and what to do in times of an accident? Are you well attended to in the event of a claim? Customer service should be on point. There shouldn’t be much fuss about it.

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Strong Balance Sheet.

Insurers are as good as their Capital and Asset base. If it is indeed argued that law is about showmanship, Insurance is about capital. Make the effort to check whether your insurance companies are making underwriting profit. Your insurance company should have healthy funds available to meet your potential claims. A key ratio is the loss ratio (claims incurred to written premiums).

Rating

It makes good business sense to know whether your insurance company is rated by a rating company. There are about 140 rating firms globally though a number of them makes huge strides in the affairs of the African continent: Moodys, Fitch, Standard & Poors’, AM Best and Global Credit Rating (GCR). GCR has rated most of the firms in Ghana. This ratings which are usually in the form of alphabets specify A to be the most solid and sound financial company with an unquestionable ability to pay their obligations when due. A+, A, A-, B+, B, B- follows in that order. The rating agencies make it easy for a customer to ascertain and compare among other insurance companies.

Regulator’s List.

Regulators also issue list of insurance companies in good standing intermittently in the annual reports. The ones with unproven financial records are often blacklisted and monitored. It’s imperative for a customer to look out for such information and factor these in their insurance purchasing transactions.

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Industry listings / Other Peer Review Schemes.

Most countries have other award schemes to rate the performance of insurance companies. A good example is the GIPC / CIMG awards in Ghana to rate and classify blue chip companies in Ghana. They, among others, tell of the market share and how well companies relate to the consuming public companies.

Read also: 7 Facts you did not know about general insurance

All the above are some of the well founded yardsticks to consider in choosing your preferred insurance company.

 

Mike Adomako, FCII.

Chartered Insurance Practitioner

Mikeadomako@yahoo.com

 

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