Are you a good insurance customer?

Published in Mint on Nov 03 2016, Written by Kapil Mehta
Buying insurance is an intense process. You share intimate details on your health and income, subjecting yourself to scrutiny from insurers. When things go wrong in this process, the instinctive reaction is to blame the insurer or the salesperson. But customers are also at fault sometimes. A few times every month, I take individual customers’ calls. These are not the cold calls that we dislike but people who reached out to us for insurance. In these meetings or calls, I introduce myself as a salesperson rather than a co-founder. I confess that—even though I love what I do—these discussions are not fun, often because of the aggression and unrealistic expectations of buyers.
This confrontational relationship between the buyer and the insurer leads to poor insurance outcomes. A badgered salesperson sees no long-term benefit in a relationship and just wants to get over with the sale. A harassed underwriter has no incentive to suggest solutions to getting insured. I sometimes feel that the process of buying health insurance worsens the buyer’s health, an example of Heisenberg’s Principle. So how can you be a good customer? Here are some pointers.
Don’t talk down to the salesperson. Examples: telling a salesperson that her company is no good, or you are going to complain to someone senior if your insurance is not issued, or show exasperation if the salesperson has difficulty following English, or yelling at the salesperson when she informs you about problems with your insurance. The salesperson may be from a socio-economic class different from yours but this does not make her lesser to the job. In fact, it makes her stand out. I find that applicants from middle-class and poor families or smaller towns have a drive and commitment that is unmatchable.
The real handicap that salespersons face is that they cannot answer back. In our cultural context, that would result in them getting fired. We should remember that many of us started our careers on the front line; I certainly did. Ask for as much information as you want, as many times, but do so courteously. Give all the facts. Here is a typical customer conversation:
Me: You said you had no health problems?
Customer: I don’t.
Me: But your report says you have had diabetes for 15 years.
Customer: That’s not a disease, you should know better.
Replace diabetes with any disease and I have had that conversation. Concealing information just does not work, apart from the fact that it is unethical. Insurers have strong underwriting teams that can extract the information you conceal. Even if the insurance gets issued, your claim will not be paid because pre-existing diseases are captured in discharge summaries, internal case reports and operation theatre records. Instead, give the insurer an accurate view of your medical history or previous claims. They want to get the insurance done and will most likely give you practical tips. Sometimes, the solution may be to buy a sum assured less than the medical threshold or select a different benefit structure.
Have realistic service expectations. Service processes and systems are poor, insurers have much to improve. Website calculators don’t work (or two calculators on the same website can give different premiums for a product). Questions remain unanswered (particularly those sent to generic email IDs). Routine information requests are made sequentially rather than in one go. Facts in the contract are wrong (I spent a month to get the spelling of ’bubbles’ in a policy correct).
Sadly, a salesperson has little ability to influence these issues. What they can do is help you navigate the system smoothly. Your expectations also need to be realistic. Customers take months to make up their minds and put together basic documents: a proposal form, identity and address proof. However, insurers are expected to turnaround applications in days.
Respect the salesperson’s time. Thrice a week I work from Gurgaon and the remaining time from Delhi. My meetings are grouped so that the travel time is minimal and, like most executives, I am particular about time being used properly. Salespersons are unable to do this because they are called often to meet clients for relatively routine matters, for example: to fill a proposal form. Customers ought to be able to do this themselves. Instead, the salesperson waits while the form is being filled. It takes a couple of meetings to get the documentation done. Appointments get rescheduled without informing insurers. A client recently complained that he wanted a salesperson to meet and follow up with him a few times because that is what he was used to. The salespersons quickly realise that—after adjusting travel and time costs—they would earn very little money.
Today, forms and payments can be completed online. Document pick-ups are coordinated by couriers. Value the salesperson’s time and use it for advice and perspective. Recognise that advice has value. Buyers regularly play one insurer or salesperson off another, make one person do the work and then buy from someone else. In motor insurance, this issue is endemic. A salesperson will share options, negotiate discounts. The client will then use the negotiated price of one salesperson to buy from another, more favoured insurer. And the salesperson who provided the advice earned nothing. Over time, this has disincentivised the system to invest in quality advice.
There are tangible advantages to being a good customer: the insurer will place the insurance properly, claims will get paid, and the salesperson will go the extra mile for you. Apart from these tangible benefits, being good is, simply put, just the right thing to do.