Do you believe in insurance agents…?
I already know the answer.
When it’s about money then we don’t want to trust even our “father” leave alone “insurance agent”.
But the case with insurance industry is little different. According to one survey done the trust factor with insurance industry is really-really low.
Earnest & young (one of the top 4 auditing firms in India) studied the relationship of 24,000 customers with their insurance agents. They found that almost 29% of the customers buying from agents end up forgiving their plans. And most of the time the product that gets affected are life insurance specific.
Now the question is…
Why don’t they trust…?
What’s the reason, why there is such a low trust factor…?
The answer is…
1. Higher turnover ratio.
The entire finance sector witnesses a very high employee’s turnover ratio. The things are even worse in their sales department. Because of this very problem the customer engagement is very low.
Selling a policy for an agent is more like achieving a target. They don’t feel like carrying along their newly build relation with them when they move. Moreover they don’t maintain a good communication with their clients once they sell.
No after sale service will only bring bad reputation to the company and you won’t be able to sell the next time.
2. Not enough good agents.
Becoming an agent is not difficult at all. If you have your 10+2 clear by any recognized institution then you would just need to pass a simple test that IRDA conducts. Once you clear that exam then you will be recognized as licensed insurance agent.
There is no other qualification required.
It is that simple.
This would mean that anyone with a degree could apply for an agent. Since there is no other control check done thus insurance agents lack professionalism. This unprofessional nature is sometimes not taken well by their clients and this is why they leave them.
In 2012, forbes reported that an insurance agent was charged in $100 million fraud.
We heard the news where an insurance agent swindled in total of $2.5 million from senior citizens. Then there is $200,000 fraud done again by an agent.
All these events when done by any industry professional then entire industry bear the shock. And this again brings distrust among their clients.
Insurance agents are not at all a burden if they are able to guide and save you money. But unfortunately this is not the scenario most of the time.
When they see that they will make more money selling one type of product then they become forceful in selling it. Rather than favoring their clients they favor commissions. This makes them more money minded and less client oriented. If you do the same then you will only loss clients.
5. Lack of knowledge.
As already said that you need to have your 10+2 clear and you can become a licensed insurance agent in no time. Since this is the only requirement you need to have, thus anybody can be an agent.
Having +2 and passing IRDA exam is no guarantee that an agent will be able to answer all your queries. Thus no or lack of knowledge about the product they are selling only brings bad reputation.
All the above given factors add up to bad user experience and thus rather than believing agents on any fairground clients prefer to run away.
To combat this very issue of distrust the entire insurance industry must take some serious steps. Either there must be some quality check or training should be provided that teaches agents how to professionally deal.
Steps must be taken on the part of agents as well to be more engaging with their clients. They must be more frequent in their conversation with them.
Unless these measures are taken this industry cannot be rescued. Till then hope you always get a good insurance agent that puts you before his own commissions.