The Ministry of Finance often issues press releases glorifying its own actions. Often, the importance of its measures does not really justify the glorification. Today's publication of an "individual service index for insurance companies," however, is not one of these cases.
The index is a very important measure for consumers. We won't be surprised if it is considered as a watershed event someday - the point at which the insurance companies put a strong emphasis on how they treat their customers when they have to spend their money and justify their insurance policies.
Every year, the average Israeli pays the insurance companies thousands of shekels to provide him with insurance coverage that will put him on his feet, financially at least, if he has the bad luck to suffer property or bodily damage or disease. This coverage ranges from relatively simple coverage for "standard" damage like damage to his car to more complex and long-term insurance policies that significantly affect the policyholder's life, such as health insurance and nursing insurance.
In recent years, the Israel public has begun to realize the great importance of the interface with the insurance companies, but this awareness has been restricted almost exclusively to the price of insurance. Every so often, there is a discussion of the yield on pension savings. Despite its enormous importance, however, the other side of relations with the insurance companies, in which the customer has to get money from the company to which he paid money for his insurance, is still very opaque to the policyholder.
As of now, the Israeli policyholder knows almost nothing about the fairness of the insurance companies when the policyholder is in trouble, and the difference in the speed at which they handle customers at a difficult time in their lives, when they are in need.
The new index is therefore important and beneficial. Even if the figures used to compare the insurance companies are not yet completely calibrated (a largely justified complaint by the insurance companies, which disclosed comparative data in many areas based on very different criteria), it is clear that the direction is right, and future indices will be much more precise. In our opinion, publishing a comparison of how the companies settle their claims will encourage competition on service, not just price, and in deeds, not just words.
The insurance companies must take the new figures seriously, mainly in nursing and health, where the situation is far from satisfactory, and in which a significant proportion of claims are rejected. Next year, the Finance Ministry should publish a rating for handling claims for loss of earning capacity, which appears problematic for claimants, similar to the situation prevailing in the nursing category.
Published by Globes [online], Israel business news - www.globes-online.com - on July 2, 2014
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