Rebates for direct insurance
Today’s Star had an article which says starting from 1 July 2009, car owners who buy motor insurance directly from insurance companies without using the services of an agent will qualify for mandatory rebates.
New customers will be given a 5% rebate on their insurance if they buy it via channels such as the internet, telemarketing, direct mailing or by walking into the insurance company. These customers would also get a 10% rebate for renewals in the second year.
Apparently, the rationale for mandatory rebates was to “promote the promulgation of alternative channels of distribution so as to increase the penetration of insurance to the masses”.
Needless to say, this move has invited loads of negative chi from insurance agents out there who see this as a threat to their livelihood. The agents went on to say that nobody from their side was consulted on this move, fearing that it will make them redundant.
I am caught with 2 views on this one. I think that agents are still needed because those insurance terms can be so confusing. This is especially true if we want to make a claim. Therefore, the thinking of using this as a way to reduce the number of part-time agents is great as we really want dedicated full time agents who know what they are talking about.
However, I also think that if the insurance companies make it simpler, then we do not really need an agent to tell us what to buy and how and why. We can do it ourselves and save some money right?
So what do you think? Will these rebates cause the agents their jobs?
