Cedric Stephens | Stressful Service Culture | Business


Three readers contributed to the content of today’s column. Two of them, exceptionally, have written about decades-old universal life insurance policies. The third person spoke to me at length and wrote about their experiences with an auto insurance claim.

Life insurance and auto insurance occupy different planets, however, the three policyholders had one thing in common: negative experiences with their providers.

The Fair Trading Commission, FTC, also helped me by inviting me to attend the 19th Annual Shirley Playfair Conference.

Carolyn Cooper, PhD, in her article last week Sunday Gleaner titled “Risy Business at Cross Roads Tax Office”, wrote that “doing business in government offices in Jamaica is a major cause of fatal stress”. His observation, as I will show as an anecdote below, is true. His claim is also false.

Poor and indifferent service are stressors. They can trigger heart problems and increase the risk of stroke, according to information from the source she cited.

She is also wrong on two fronts. The Jamaican Revenue Authority (TAJ) is taking action to reduce the issues Dr. Cooper identified at Cross Roads. As I wrote last week, TAJ is moving another part of its tax collection process online. This should increase efficiency and help relieve some of the stress that employees and taxpayers have had to endure for many years. Visitors to the TAJ website will see proof that the latest initiative is part of a series of ongoing activities aimed at modernizing tax collection.

The premise of Dr. Cooper’s argument was incorrect on another level. He suggested that all government departments provide poor services and, by implication, have given private sector companies – such as insurance providers – a “bane”. An article I wrote two months ago, “Lessons for Insurers of NHF Service Delivery”, refuted this argument. Specifically: The auto insurance provider I referred to earlier said last Wednesday that during the pre-settlement phase of her claim she was so stressed that she was put on medication to reduce his blood pressure.

Universal life insurance problem

The Insurance Act 2001 calls for long-term life insurance contracts. Non-life contracts like auto insurance are short-term contracts – they usually don’t last more than 12 months.

Life insurance policies remain in force for decades. Life insurance claimants bought their policies over 30 years ago from the same company. They independently concluded that they had not been treated fairly. The products they purchased did not perform as expected. Thousands of dollars in premiums paid over the years seem to have gone up in smoke.

When insurance products do not meet consumers’ expectations, it can also contribute to stress-related illnesses. This subject is invariably ignored in insurance texts, training courses and rules issued by the regulator. Insurance service providers invariably have to make the connection – which they often don’t – or interpret the rules to their advantage. The UK’s Financial Conduct Authority (FCA) has demanded that insurers treat consumers fairly and that this principle be placed at the center of insurers’ business model. Fair treatment of clients is interpreted in the context of six outcomes as follows:

Outcome 1: Consumers can be confident that they are dealing with companies where fair treatment of customers is at the heart of the corporate culture.

Outcome 2: Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly.

Outcome 3: Consumers receive clear information and are kept appropriately informed before, during and after the point of sale.

Outcome 4: When consumers receive advice, the advice is relevant and takes their situation into account.

Outcome 5: Consumers receive products that perform as businesses have led them to expect, and the associated service is at an acceptable level and as they have been led to expect.

Outcome 6: Consumers do not face unreasonable after-sales barriers imposed by companies to switch products, switch suppliers, submit complaints or file complaints.

In Jamaica, the 2019 FSC Market Conduct Guidelines were drafted by the Financial Services Commission (FSC) four years after the FCA’s results-based principles, and the commission subscribes to the fair treatment doctrine of the authority. The FSC claims in its rules “to establish specific standards for insurance companies and intermediaries in the conduct of business with clients”. However, he failed to describe anything specific in these rules that closely resembles the FCA’s six fair treatment outcomes.

Based on my information on the universal life insurance product and the changes that have occurred over the years, it is unlikely that consumers who have purchased this product will be compensated for any losses they may suffer. Proving unfair treatment, based on FCA Outcome 5, and actual consumer experiences would have been easier if outcome-based principles were in effect in Jamaica.

Engine claim problem

Poor quality of service comes in many forms. Making representations that are believed to be true but inaccurate is one of them. Another is ignorance of the product, but acting as if one is informed. Both were exposed in an email written by an official at an insurance company.

The first revealed a lack of knowledge of the general conditions of the policy of this insurer. The other concerns the inability of the person to understand the legal framework in which the automobile insurance business is to be carried out.

Despite these obstacles, the Claimant won in strength of her personality and her knowledge of the claims process and is now in the final stage of resolving her claim. And the bonus: her blood pressure is returning to its normal level, and she is no longer taking any medication.

Final words: A Jamaican computer scientist working in the UK contacted me after reading last Sunday’s article. He said he had developed a solution to the problems identified in the article.

Cedric E. Stephens provides independent information and advice on risk management and insurance. For free information or advice, write to: [email protected] or [email protected]


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