Page 5 - Life Insurance Today December 2017

Cover Story

MIS-SELLING

CONTINUES TO BE

RAMPANT IN

INDIAN INSURANCE

SECTOR

T he insurance business is affected by the churning products and must make it absolutely clear to agents and

of policies, which means a customer is forced by
other officers that they should not mis-sell. The Insurance
the agent or the sales personnel to surrender his/
her existing policy to take a new policy, which Regulatory & Development Authority of India (IRDAI) has
cracked down on mis-selling of insurance. Mis-selling in
benefits the agent or sales personnel but negatively common parlance refers to unfair or fraudulent practices
impacts the customer. There have been numerous adopted at the time of soliciting and selling insurance and
instances of customers being mis-sold policies which do generally includes selling policies which have not been
not address their financial needs. sought by the customer or which are different from what
the customer wanted or was promised or where the
The reason why insurance is stumbling in India is because product offered for sale is not suitable to the needs of the
of mis-selling of products and complex products. If you customer.
want to sell insurance to India, you must sell simple
Mis-selling by banks is a big problem. An online survey
About the author conducted by economictimes.com in November 2015
showed that three out of five customers were mis-sold
Mr Jagendra Kumar is currently the
Corporate Head (Training) at Shriram investment products by banks. More than 36%
General Insurance Company. Mr Kumar is a respondents listed this as one of the major pain points in
prolific writer and has wide experience in their dealing with their bank.
the general insurance industry. Before
Jagendra joining SGI he was the Ex. CEO in Pearl
Kumar Newbie investors and those with deeper pockets were
Insurance brokers.
most at risk. It's not uncommon for bank staff to peek into
The trouble with the rat race is that even if you win, you’re still a rat.

Life Insurance Today December 2017 5

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