In a recent meeting between Central Bank (aka Bank Negara) and industry (both conventional insurers and takasul operators) officials, Central Bank has directed the industry to make necessary preparation for a 1st May 2011 roll-out of the framework implementation…. which is a surprise considering earlier on, the implementation date was set on 1st Jan 2012.
Yes! No one gets rejected simply because he smashes up his or someone else car....
Accordingly, this 1st May roll-out is more of a prelude to the 1st Jan 2012 core implementation. What’s entails in this roll-out has one single most important objective, that is to ensure all insurance buying customers are not rejected and given a run-around getting their vehicle covered.
Other objectives would include the following:“Single most important objective…. Industry cannot reject customers buying insurance or giving them unjustifiable inconvenience….”
- No unfair pricing of motor premium
- No unjustifiable cross-selling (using packaging of products to force….) or system-driven (automated) selling of other insurance products when selling to the customers
- Any motor insurance cover requested that is not within the insurer or takaful operator’s internal motor guidelines, the industry is to issue such cover to the Malaysian Motor Insurance Pool (aka MMIP). And, before issuing the MMIP cover, the customer should be advised accordingly and having agreed with the type and nature of the cover issued. Do note DUMPING of cover into MMIP or any attempt thereat is NOT really an option for the industry!
- The industry should explain to the customers those available motor extension coverages, i.e. passengers’ liability, flood, windscreen…. so that options are made available to them
- Industry should review their underwriting guide to make it more pleasant for those “displaced customers” – “displaced customers” in this context is about those customers having their private motor cars and motorcycles being dumped without good justification into the MMIP. As MMIP is a pool catering for HIGH HAZARDOUS vehicles, this category of “private cars and motorcycles” should not in the first instance be written into the MMIP. To further stress…. as a matter of example, the industry cannot raise the issue of third party insurance coverage as a loss-making portfolio therefore enforce a DECLINED across all segments of the buying public! There is no justification to such across-the-board sort of enforcement…. What the industry should be focusing on is check the background (including loss records) of the customers and apply the declined-related decision accordingly, NOT write him or her off as if is a PORTFOLIO or worse…. FACELESS!
While we have written down those objectives and the various areas of focus in order for the industry to achieve the directive…. so, what’s in it for the agents or perhaps the other intermediaries? Frankly speaking, there is NOTHING for the agents (and other intermediaries) – NO commission BUT really…. more tasks at hand!
While NO COMMISSION there is to this 1st May roll-out, agents should look at this from the perspectives of HALF FULL cup rather than HALF EMPTY, which we think agents are not disagreeing to it…. we supposed there are opportunities in this roll-out, it is a matter of mind-set!
“Agents are expected to mirror what the insurers and takaful operators are doing… no rejection or turning away customers but lend a helping hand to them”In this context the following are what agents can do to help out with the industry, and in doing so help their agency reinforce services to both customers and industry:
- Agents should likewise NOT reject the buying public outright (based on the internal motor guide) but instead direct them to their principal(s) for assistance or the best practice, to help the public buy the MMIP cover…. The latter best practice should help agents reinforce their brand and services level
- (Customers going direct to insurers / takaful operators are NOT going to get any form of DIRECT REBATE….) thus agents compiling the customers documents and bring them over to their principal’s office should be able to charge the customers a small CONVENIENCE fee for handling the full process for them – THIS IS REALLY AN OPPORTUNITY!
- Agents helping the buying public with the run around should eventually be rewarded by both the buying public and their principal(s)… Why?
- The customers’ perspective: “I will go back to this agent who despite NOT getting anything helps resolve my buying needs!”
- The Principal’s perpsective: “We shall reward those agents who despite NOT getting anthing but yet, resolved to help the buying public made the necessary purchases… and in the process helps reduced our workload, firstly by working out the necessary documentation & coverage and secondly, help remit the premium to the them.
“We hope the agency channel views this recent adoption as something strategic for them and look at the opportunities rather than with dissappointment….”