Interview : Nick Zaranyika
How can Nigerian health insurance companies address the lack of consumer trust?
NICK ZARANYIKA: Everyone has a role to play in increasing confidence and trust in the industry. It requires effort from the entire health care system, starting with regulatory bodies, health care providers, financiers and stakeholders. Of course, insurers must be certain that providers are fairly compensated for their services, so that insured customers are treated well. Health care practitioners have an obligation to deliver quality services that ensure good clinical outcomes, and regulatory bodies must create an environment that promotes cohesion and a common purpose.
To what extent is industry development held back by fragmentation in the market?
ZARANYIKA: The industry is indeed fragmented at the moment, with mixed messages circulating publicly. This impacts confidence in health insurance, resulting in the prevalent low level of use. People who might otherwise purchase health insurance are sceptical of the system’s efficacy. This has resulted in out-of-pocket spending remaining at an estimated 70% of total health care expenditure. Health insurance spending, however, is estimated at only around 5%. That is quite low in comparison to developed markets, and even compared to markets in some developing countries. Enacting stricter and more focused regulation will put pressure on smaller industry players and result in consolidation, leading to the emergence of a few large insurers.
What opportunities are there in the retail segment for both established players and newcomers?
ZARANYIKA: For a number of reasons, the retail sector remains largely untapped. In light of the low levels of public confidence in insurance in general, legislation will be required to unlock the full potential of the market. The pensions segment, for instance, benefitted immensely from legislation. If health insurance is made mandatory, it will open huge opportunities for insurers in the retail space. In order to extract value from retail business, insurers must invest in technology-driven distribution channels, innovative servicing models and premium collection methods.
There are a number of benefits to be derived from technology, ranging from its application in basic administrative functions, to innovative and advanced applications used in customer service and data analysis. Technology focusing on behavioural analytics can also be used to mitigate risk and detect fraud.
How is adoption of mandatory insurance schemes evolving at the federal and state level?
ZARANYIKA: The federal government has yet to make health insurance mandatory, though this change would encourage the development of universal health coverage. Some states, including Lagos, Delta and Bauchi, are making impressive progress in this regard. I believe we will see more and more states roll out mandatory schemes, while industry stakeholders will continue to lobby for the federal government to follow suit.
How do you assess the condition of the country’s health maintenance organisations (HMOs) in terms of their service delivery?
ZARANYIKA: The service experience of customers is linked to their experience when they access care. HMOs need to ensure that the relationships they have with health care providers are strategic, progressive and mutually beneficial, so that the customer has a good experience. HMOs must also address the trust issues that characterise their relationship with providers, and they should ensure that their customer servicing model is well defined and supported by established customer-centric principles and technology. A high standard of human resources, good above-board corporate governance and ethical business practices are all equally important for ensuring customer satisfaction.
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