Tapping into Fiji’s Insurance Market25/08/2016 11:21
Life is unpredictable. Anything can happen to you, your loved ones, your property and other belongings. This is why one needs to have some form of insurance to cope with the unexpected risks. Individuals, households and businesses buy insurance cover to protect themselves from unforeseen circumstances and risks.
The insurance industry in Fiji comprises of insurance providers, brokers and agents. There are many general insurance products in the market. Consumers here mainly purchase health, life, travel insurance, property insurance against flood, cyclone, fire, burglary and motor vehicle insurance. There is compulsory third party insurance which is mandatory.
Insurance can protect people from financial devastation should the worst-case scenario happen. This can include damage to property, illnesses, or even death. If something unexpected does happen that is covered in your policy, it simply means you won’t have to pay the full cost for the loss.
But the bigger question is: Why many consumers, especially the working class, are still not purchasing insurance covers. Perhaps, not every Fijian can afford to take up insurance or they are aware of the delays and running around one has to do to get their claim processed. There are also some consumers who do not view insurance as a back-up plan to deal with losses to property. A good example is the catastrophe caused by Tropical Cyclone Winston early this year, which saw many families losing out on their livelihood. Some families that had a cyclone cover were able to get back on their feet with the pay-out from their insurers. However, many who didn’t have any cyclone covers are still suffering.
There is a need to look at the industry critically, especially, the types of products offered to the Fijians.
We all know it is so easy to get an insurance cover but making an insurance claim is exhaustive. Though Fiji’s insurance industry is regulated under the Insurance Act 1998, it still is plagued with irregularities, which are reflected in the consumer complaints and concerns received by the Council for a decade now. Not many are aware about the role of the Reserve Bank of Fiji as a regulator of the insurance industry.
The insurance sector remains on the Council’s radar given the intensity of the problem. For instance, some consumers have a cyclone cover but does not qualify to make a claim for their damaged roof as right type of screws were not used. Consumers are still given a run around despite having an approved engineer’s certificate in place. Then, there are consumers who reside in flood-prone areas but no insurance-provider wants to sell them flood-cover.
The Council had compiled a Report on the insurance industry in Fiji, titled: “The Insurance Industry in Fiji, Consumer Protection Issues” in 2008 funded by AusAID. The report looks at the insurance sector, focusing on consumer protection, terms/conditions of each package provided by the insurers, key problems, law, consumer frustration, non-disclosure of information, delays in settling claims, Reserve Bank of Fiji’s role as the regulator and industry’s performance.
A pressing issue highlighted by some complainants is related to the policy document provided by the insurance companies. This consists of fine prints, ambiguous clauses and jargons in the insurance policies, which a common man on the ground will have difficulty in reading and understanding.
Considering the ongoing problems affecting the insured consumers and with the urge to find a way-forward, the Council has planned to hold a series of seminars and discussions with important stakeholders of the industry on different types of insurance covers sold in our marketplace. Property Insurance, Medical Insurance, Life and Compulsory Third Party Insurance are some of the topics that remain on the Council’s agenda. The intention of these forums is to discuss the current laws and practices and possible reforms required to better protect consumers and insurers. The first stakeholder’s seminar was held on ‘Property Insurance’, on 11 August in Suva which saw a robust discussion by all key stakeholders making up the industry.
The Council is of the view that consumers deserve to be given full disclosures and accurate information about the insurance products offered by the insurers. This will enable them to make an informed decision when choosing the specific products to suit their needs. At the end of the day, the real benefit of insurance is to reduce the financial risk and give consumers the support they need when the unexpected happens. It is all about having peace of mind!
Next week, read about Property Insurance.