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Insurance Agents least trustworthy for those buying insurance: ASSOCHAM study

Agents least trustworthy for those buying insurance: ASSOCHAM study

The report suggests people to select agents very cautiously.
Team Cafemutual Jan 9, 2017

Insurance agent is held to be the least trustworthy source in the sales process of an insurance policy across different policy segments (both among the financially literate and financially non-literate consumers), says an ASSOCHAM study.

Among the people who have no specific knowledge of insurance and finance and in the age group of 18 to 60 years, 72% said their agent was the least trustworthy source in the sales process of an insurance policy.

The second least trustworthy source in the sales process was the insurance company itself, though the percentage on this count was much less at 29%.

34% of the financially savvy (those who can interpret the insurance policies) in age group 25-40 years consider agent and sales person as the least trustworthy in the sales value chain, followed by the insurance company itself.

Likewise, misrepresentation of benefits was also an area of concern. On this count, the financially savvy in the age group of 25-40 years felt more let down. As many as 65 per cent of them, who were covered in the ASSOCHAM study, found the issues on this score.  Besides, 43% of those in the age group of 18-60 years and those who are not so financially savvy, also found the problem of misrepresentation of benefits.

“There is a need for simplification of processes and procedures of insurers to take away the awe and fear of the common man on different products. Demystification of insurance concept is a necessary requirement for people to take to this in a large way, particularly, in the background of low financial literacy,” the association said in a press release.

The press release said the industry also needs to do a few things to hasten up the process of insurance inclusion. The product space is cluttered with a large number of complex policies. “There must be simple, standard vanilla products in personal products.”

The study suggested that since the insurance agent or the sales person is the face of industry, it is of utmost importance that we select these agents very cautiously. Right from spreading the awareness to conducting the need analysis for a sale, to servicing the customers’ request in time, to explaining and supporting customers in times of claim, sales representative must do it.

1 Comment
Prashant · 3 months ago
This is very funny. Where did assochem study this is a big question. Agents are the only people who service the customers and not the banks or brokers or website aggregators or company themselves. Maximum surrender rate is from banks and brokers sold policies. No study reports are produced. This is a malicious study. May be insurance companies don't want agents and wants to save on comissions. The problem is it does not get passed on to the customers but the companies keep them. We all know what happened with ULIPs. The total expense was cut only to the tune of 5% but agents commissions were reduced by 20%. Banks sell to their customers in the most unethical way and so do brokers. Banks miss-sell by wrongly explaining people about the benefits I.e. If someone wants to create FD they say a policy will give them better return and also by forcefully making customers sign for the policies if they want a faclility or a loan. Brokers buy the data and call and literally dupe people by saying some weird things like your agent has left the system and a bonus of Rs150000/- is pending to be paid to him. If you buy a policy from us we will transfer the bonus to you. When we call IRDA, they say you give a police complaint and complain to the company but they will never proactively investigate and ban that broker.

This is a malicious study. Agents are the ones who keep a track of renewals, collect them and also help a customer with 17 different kind of services including claims which no other community does not even companies themselves.
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