(Customer voice) Customers better off buying insurance online

I AM not surprised that the Monetary Authority of Singapore (MAS) discovered a poor standard of financial advice by insurance advisers when it conducted a mystery shopping survey ('Findings of MAS financial advice survey 'disturbing''; last Saturday).


The finding is unsurprising because the insurance industry is commission- and product-driven, which breeds a conflict of interest and incompetence. Until the current culture of product peddling is changed, insurers and their agents will not be able to serve the public properly.

I agree with MAS assistant managing director for capital markets Lee Chuan Teck, who raised questions about the roles of financial advisers.

One efficient way of selling insurance may be via online portals, which do not load products, helping customers save on hefty commissions.

Online purchases come without hard-sell tactics and pressure, as well as undue influence from middlemen who may push products that earn them the most commissions - even if the products do not suit the customers' requirements.

If insurance agents can make sales without giving advice and with little disclosure of product information, I don't see why products like whole-life and endowment policies cannot be sold online.

All that is needed is an algorithm to guide consumers about product education, calculate the quantum of coverage, and produce a benefit illustration before they take up the policy - just like buying car insurance online.

If consumers do not receive any quality advice from advisers, why pay commissions when they could be better off purchasing online?

Clients should pay for advice, and not the product.
Jimmy Koh

Source: The Straits Times - 11 July