Sunday, April 06, 2008

Future role of the intermediary

Hi Mr. Tan
If more insurance companies offer their products through the internet, is there a need for insurance agents?

Insurance agents will continue to play a useful role. They have to advice the customer on making the final decision, after the customer has obtained most of the information from the internet. As the insurance agent takes less time to make the sale, the commission rate can be reduced.

This is similar to the situation with buying shares from a stockbroker. The brokerage is now 0.3% (as compared to 1% previously). The stockbroker continue to do well through a larger volume of business.

I use a stockbroker to obtain relevant information and handle the transactions. This is more convenient than searching for the information by myself. I do not mind paying a slightly higher brokerage (compared to transacting through the internet), as the service is valuable.

There is a role for insurance agents in the new environment. The new system will be more efficient and will reduce cost for the benefit of everybody. The agent can earn a fair rate of remuneration, but should not be placed in a conflict of interest.

The challenge is making the change to move forward.


Anonymous said...

Fee based advice is a fair model.The adviser prescribes the recommendations and the client has them implemented at any of the "pharmacies"(insurance companies) or distributors .The prescription paper must bear the stamps of the registered adviser so that a discount or special price(premium) will be given.
If the client wishes to have the recommendations implemented by the adviser the fee will be waived. In this way , customers have more choices to avoid conflict of interest and same time get proper advice.
Fees will be determined at the preliminary meeting. The fees charged will be based on the scope of service and to be agreed between the adviser and the client.
This approach may slow down the process but it is good for the client who expects to be examined first before 'medicine' is prescribed.
I cannot see how 20 to 30 cases can be closed in a day by insurance agents. This is happening and it is madness. These agents are mdrt, cot and tot agents. How do they do justice to their clients? You can see that they are not interested at all. They are interested only in the money and clients' interest is compromised and sacrificed.
MAS must stop all these malpractices. The Fair Dealing consultation paper must address this problem.
MAS must not allow insurance products to be sold without the needs of the cleint conducted first.Need analysis must be made compulsory and no product selling.
Everyone is responsible if there is a professional misconduct, from the CEO down to agents' supervisor and the agents themselves.Internal stringent check is conducted at every level.If MAS is serious about
eradicating malpractices all these must be done.


Anonymous said...

I do agree that to get to the top the insurance agents get unethical and committed a lot of malpractices . It is almost impossible for an agent to close so many cases without compromising the needs and interest of the clients .I was told those who attained those awards like mdrt or tot are product sellers and pushers and used unscrupulous means most of the time to beguile their clients.A trainer friend from a top insurance company shared that the fact finding forms of these agents cannot pass under scrutiny .The forms are full of loopholes for legal suits by customers but the company does not care as long the sale can add to the bottom line. The premise is , it is crime only when you are caught. In other words, the company's attitude and the agents' attitude are the same. This is the conspiracy and the customers have no idea what hits them until it is too late.
MAS must regulate directly and cannot leave to the companies. No company would shoot its own foot by applying stringent measures to comply with MAS.

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