Here is how individual insurance agent can deal with direct plans in insurance

One of our readers wrote to us with this query:

Hi Team,

I am an insurance agent. I am facing a problem these days. Whenever I approach a client with a proposal form, he visits official website of the insurance company to check insurance premium. Since insurers offer attractive premium online, they either buy policy them or ask for discount, which I cannot extend.

I make people understand the nitty gritty of product but to no avail. What can I do in such a situation?

Santhosh Balakrishnan

Dear Santhosh,

Thanks for writing to us.

There is a major change in the insurance industry from April 1, 2023. 

IRDAI has introduced direct plans in insurance. With this, insurance companies have to reduce the premium if a policyholder buys an insurance policy directly from an insurer. Such a reduction will happen from expenses of management which includes agents commission.

While insurers were allowed to sell insurance policies directly to the policyholders, there wasn’t no reduction in premium earlier.  

Now, coming to your question, in our view, you can follow these three things to deal with direct plans in insurance:

Give solution: Agents should move their client conversation from product to solution. For instance, instead of talking about term insurance, you can have a discussion around succession planning of clients with the tentative sum assured. 

Also, you can help him evaluate sum assured needed for life insurance or health insurance by asking relevant questions like number of years left for retirement, no. of dependents, current lifestyle and future endeavour. This way, client will feel more comfortable working with you as you are keeping his interest first. 

Ease of claim settlement: Talk to them about how you can help them or their family during uncertain time. People buy insurance to avail claim but it is easier said than done. And this is where, agents can add value. 

You can take them through the entire process of claim settlement with tentative timeline and give them assurance that you are there for them always. Also, offer value added services, which are required during claim settlement process like consultancy from claim experts, regular update on claim request, assistance in issuance of death certificate and so on. 

Give them options: Agents cannot have multiple tie ups. They can only work with one life, one general and one health insurer. However, agents can become a sub broker of a broker to distribute insurance policies of multiple companies.  

A few large brokers empanel individuals to act as sub brokers and offer host of products and services. Since insurance brokers can have multiple tie ups, they offer host of policies at attractive prices. This way, you will be able to offer range of options specially to price sensitive clients.