Information after the point of sale :
While providing information to the consumer at the point of sale is critical, the responsibility of the insurance companies does not stop there. In fact, information after the point of sale is equally important. Since insurance is a service, the various touch points of insurers in the customer’s insurance life cycle assumes a greater importance.
The information required after the point of sale could comprise the following:
(a) Information on various benefits which accrue from time to time, e.g. Bonus declared in Participating Policies
(b) Periodic information, not more than yearly frequency, on the performance of funds in the case of unit linked insurance policies
(c) Market information in respect of funds of various unit linked insurance policies
(d) Periodic reminders about the premium payment ahead of the due dates
(e) Informing customers upon change in status of the policy, such as Lapsed, paid up, reinstatements etc.
(f) Claims related information after intimation about a claim. Assisting the consumer in getting the claim settled. In fact, this is the most important stage after the point of sale where consumers require lot of information in getting the policy benefits. Insurance companies must take care to furnish the required information
Outcome 4: Where consumers receive advice, the advice is suitable and takes account of their circumstances (RIGHT ADVICE)
Since insurance is one of the products in managing finance and risks, a wholistic approach towards advising the customers on selection of the product which suits the needs of customers is critical. The advice must be unbiased keeping the customers’ interests in mind and the distributors interests. For example, a distributor may recommend products which pay him maximum remuneration. It must be remembered that a right advice could increase a salesman’s future income as a satisfied customer refers other customers.
The test to find whether the advice is right to check whether the product sold reflects the customer’s needs, priorities and circumstances. While the distributor has the primary responsibility of delivering the right advice, insurance companies can check with consumer directly, after the sale is made, as to whether the product purchased by the consumer has fulfilled his needs and that he is satisfied with the sales process.
Outcome 5: Consumers are provided with products that perform as firms have led them to expect, and the associated service is both of an acceptable standard and as they have been led to expect (RIGHT GUIDANCE)
The above outcome has the following elements:
(a) Performance of products sold as per what has been promised at the point of sale
(b) Delivery of acceptable service standards as promised at the point of sale
This principle addresses the Policyholders Reasonable Expectations arising out of what customer has been lead to believe by the Insurers and their representatives when a product was sold. This emphasizes the importance of integrity in business. Business Integrity is just delivery of “Promise only what you can deliver” and “Deliver what you have promised”. If integrity is comprised, reputation of the Company’s brand is at stake and ultimately threatens the entity’s existence.
In Unit Linked Life insurance policies, a portion of the premium paid by the consumer is invested in stock market linked securities which are subject to the vulnerabilities of stock market. Fairness to customer assumes a lot of importance in such policies. It is possible that the consumer would have invested in such policies with the expectation (which was set by the insurer and distributor at the point of sale) that the insurance policy may deliver a reasonable return over a period of time. Under such circumstances, if due to a fall in the stock markets, if the customer experiences a fall in the fund value of his investments, the delivery by the insurance company could fall short of the expectations. On the other hand if the customer has been given a fair chance and reconciled himself at the point of sale that there is a risk of erosion in the fund value due to downfall in stock markets, the expectation is set right.
As already pointed out in the earlier section, even an unintentional misstatement or non disclosure about the health status of a consumer in the proposal form could lead to repudiation (non payment) of policy benefits. This could severely impact the fundamental policyholder expectation, which is payment of the intended policy benefit for which the insurance policy was taken.
Similarly expectation in service could be impacted if for example the turnaround time for delivery of a service is unreasonable.
Outcome 6: Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint (RIGHT AFTER SALES SERVICE)
This principle is intended to make life easier to the Policyholder on the after-sales service expected by him from the insurance company.
For example, in India portability* of Health insurance policies was a pain area for consumers. Insurance companies used to disallow transfer of the credits earned by a Policyholder (e.g. “No claims bonus”) under a Health Insurance Policy, upon the consumer changing the insurance company. Under the new Health Insurance Regulations, IRDA have mandated transfer of the credits to the new insurer.
“Portability” means the right accorded to an individual health insurance policyholder (including family cover), to transfer the credit gained for pre-existing conditions and time bound exclusions, from one insurer to another insurer or from one plan to another plan o f the same insurer, provided the previous policy has been maintained without any break.
Similarly, the claims process must be kept simple from consumer’s perspective. Here consumer includes the “Nominee” or the “Legal heir” who receives the policy benefit upon death of the life assured. Since a claimant may not have even knowledge about the insurance or the processes related to claims settlement, extra care needs to be taken by the insurance companies in handling the claims. Usually, the pain areas from customer angle are the exclusion of claims, i.e. non payment of claims on the ground that the particular circumstance under which the claim is made is not covered. For example, under health insurance policies, pre-existing illness is a pain area for policyholders. The attempt of insurance companies must be ensure that a fair interpretation of the policy clauses is given under such circumstances when a claim is excluded. The benefit of doubt, if any, must be given to the Policyholder or his or her nominees or legal heirs.