Insurance agent is taken as 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, an ASSOCHAM study has found.
Among the first set of people with no specific knowledge of insurance and finance and those who fall in the age group of 18 to 60 years, 72 per cent of those covered in the study said their agent/sales person 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 per cent.
The second set of people who are financially savvy and can get better interpretations of the insurance policies find their agent and sales person as the least trustworthy in the sales value chain. As many as 34 per cent of this set of people, aged 25 -40 years, found the agents lacking on trust, followed by the insurance company itself.
Likewise, misrepresentation of benefits was also an area of concern. On this count, the more let down was felt by those who are financially savvy and are in the age group of 25-40 years. As many as 65 per cent of them, who were covered in the ASSOCHAM study, found the issues on this score. Besides, 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. Forty three per cent of them said there are problems with regard to 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,” ASSOCHAM said.
He 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 ambassadors 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.”
The lack of information of our customers is what creates the disconnect; once that is taken care of all, apprehensions will slowly begin to disappear.