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Saturday, May 2, 2020

Insurance Agents as Field Underwriters

Insurance Agents as Field Underwriters

Insurance agents have a role not only as salespersons but also field underwriters and consultants for prospective customers. 

When meeting with non-insurance people, a lot of questions arise when insurance agents present insurance products. For example, in motor vehicle insurance products, the first question is usually related to the type of coverage. Of course, this is a basic question that is often asked by ordinary people. Although insurance agents who have been selling this product for a long time will be relatively easy to answer, sometimes it is still necessary to have a deep explanation in such of the claim report.

Second, the insurance agents must know the various risk extensions that can be sold in motor vehicle insurance along with the applied premium rates. This also should not be too difficult for insurance agents, it only needs illustrations such as the extension of third party liability coverage and the premium rate that will be set. Here also note that the third party liability cover is a "combined single limit" where the insurer does not compensate for third party losses of unlimited value.

Third, insurance agents must also be able to explain to prospective customers related to the long-term coverage period or more than 1 (one) year. For example, when meeting with the bank as loan providers, they want to get a simple premium calculation system for the period of coverage that will usually be adjusted to the credit period as stated in the credit agreement with the debtor.

From the aspect of premium bills, single payment at the same time for long-term insurance policies is indeed simpler but has weaknesses in the policyholder's side when claims for total loss occur in the first years of the insurance period. Let's say a vehicle insurance policy for credit objects is made 3 (three) years at a time and then there is a total loss claim in the first year then automatically the insurance policy is no longer valid or cancelled by itself in the following years. Even though the premium paid is for the 3 (three) years.

Fourth, other weaknesses that may arise in case of partial loss claim for long-period insurance, there is no adjustment to the vehicle price (market price) in renewal policies in the following years where there are provisions for recovery of the price of the insurance (reinstatement of sum insured) after a loss occurs. Partial loss claims in motor vehicle insurance will reduce the sum insured in the remaining period of insurance. If in the initial year there has been a partial loss claim if there is a total loss in the following year then the compensation will be calculated from the market price (market price) immediately before the claim occurred (with the maximum referred to the sum insured stated in the policy schedule) deducted by the aggregate of the previous partial loss claim paid by the insurer.

Fifth, the question of prospective customers in the case of insurance claims due to "riots" during political campaigns may be a blunder for insurance agents. If the insurance agent does not understand well the terms and conditions of the insurance policy, the answer can be misleading and potentially cause disputes when claims occur.

From the things that might happen in various situations above, we need to take lessons that insurance agents are actually field underwriters. They must understand a lot about the technical aspects of insurance. Similarly, when life insurance agents want to sell an insurance product combined with a mutual fund or unit link product, in-depth product knowledge is needed. If not, the consumers may experience when the claim they filed turns out to be rejected due to different explanations at the beginning of their meeting with insurance agents. So for insurance agents, do not ever get bored to always read the insurance policy if they want to succeed in undergoing their profession.

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