The Hindu Business Line : `Training for bank staff to sell insurance products inadequate'

EVEN while banks, who act as corporate agents of insurance companies, proclaim that select officers who have undergone training in insurance would be able to tackle customers' enquiries, industry observers are sceptical about the training per se.

In an informal chat with Business Line, the Professor and Dean of the Hyderabad-based International Institute for Insurance and Finance (IIIF), Dr B.S.R. Rao, called the 100-hour training `a poor apology' especially because in marketing of insurance products the agents, instead of helping the customer to decide , were more often keen to market the product. ``Targets take a precedence. Instead of apprising the customer, they give the brochures and follow up by asking them for business. This is very sad,'' he said.

According to him, the insurance agents themselves were by and large not professionally trained, for they rarely looked into the insurance needs of the public. ``There are certain basic ethical issues involved in regard to sale of life insurance policies. There is a large amount of turnover of insurance agents resulting in the lack of continuity in the service to the policyholders. The after-sales service to the policyholders leaves much to be desired,'' he said.

While conceding the bancassurance model as a novel experiment, he refused to comment about the success or failure of this model at this stage.

He, however, emphasised the need for conducting a market research. ``The design and development of new policies and modifications to the existing policies need to be firmly based upon market research.

Dr Rao was in the city to inaugurate a national seminar on Indian Insurance Industry - the Road Map, organised by the Jansons School of Business.

Reverting to the state of the insurance industry in India, he said that the penetration and insurance density were far from satisfactory. (Insurance penetration, i.e. the premiums as a percentage of GDP was 2.71 in 2003, while the density, which is given by per capita premium was only $11.5 against $3,394 in the UK and $3,266 in the US).

According to Dr Rao, a number of policies were being sold to policyholders, but there was either no risk protection for a large number of people, or where it was provided, the cover was found to be grossly inadequate. Dr Rao expressed concern about the poor cover for health insurance. The insurance industry, he said, had a responsibility to make insurance available at affordable rates to all.

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