Why are insurance brokers in India struggling to survive?
In India, Insurance industry is blooming bright and right without a doubt. Meanwhile, a few insurance brokers are failing to survive due to some reasons. Generally, people can contact the insurance companies directly and purchase the policies at a discount, so what is the need of an insurance broker. There has been not much clarity on the role of insurance brokers even among brokers. Also, a few brokers consider themselves as persons who do rebate and discount service of premium insurance companies. Additionally, there are so many things that holding up from succeeding. Let me list out one after another.
1. People don’t know if they need certain policy and why.
Does it matter to brokers about problems that people face? Yes, it absolutely matters. I will tell you why. Brokers are the only insurance professionals who work with both people and agents. The very basic role of an insurance broker is to advise people to pick the right policy for their requirements. More than 46% of people are buying policies which they don’t even know why they are buying. In India, insurances are bought merely based on price but the proper way is to follow up with brokers advice, realize why they need the policy, and then proceed to payment.
2. Giving advice to people before going on deep research about the product.
If the broker has given incorrect advice, he should be responsible and take those insurances against risks. It is extremely dangerous if he is giving advice to complex and risky business like aircraft insurance. The customers even have the right to sue insurance brokers for his wrong advice. Therefore, you have to take a deeper look into customers needs and help them with what exactly they need. Customers expect brokers to deliver multiple solutions for their needs.
3. Brokers entering insurance industry just to make a huge profit.
A few insurance brokers view insurance broking business as a business worth investing in. So, without implementing professional practices and strategies, they start advising. Brokers with this mindset will not be able to provide services professionally and ethically.
4. Services offered by brokers are limited to few.
As Insurance Brokers Association of India (IBAI) says, the major services to be delivered by brokers in India are,
- Understand client’s business and risk management philosophy
- Provide risk management and insurance consulting
- Highlight market knowledge and insights to customers including insurance covers and terms
- Provide underwriting information and other services such as modelling to insurers
- Help customers in deciding among quotes and policies
- Help customers during claims and servicing stage
- Assist customers and insurers through various value added services
But only a few play all these roles, the rest of them either play policy price discoverers or lack expertise and develop a untrustworthy relationship with customers. These are also the reasons why customers change from one broker to another. According to IBAI Corporates’ Survey, nearly 80% of respondents mentioned that the most important reason to switch brokers as ‘poor servicing by brokers’.
Now, identify what might be the reason that’s holding you back, rectify, and that’s it! There you go. If you have interests in knowing more about insurance and brokers, check out these valuable articles and improve yourself. Worth the time!