Year 2007 - Critical Success Factors

What are the critical success factors for Hong Kong Insurance Intermediaries and if CEPA 4 a panacea for them According to the statistics released by the Office of the Commissioner of Insurance, the total gross premiums of the Hong Kong insurance industry continued to achieve a double- digit growth of 13.7% to reach HK$ 156 billion in 2006. The insurance sector accounts for over 10% of Hong Kong’s GDP, making it an important pillar of our economy. The success and prosperity of the insurance industry would not be possible without the contribution of insurance intermediaries. Insurance intermediaries have a crucial role to perform: they provide professional advice to the insuring public, help them analyze their insurance needs and choose the suitable insurance products, and assist them in the settlement of claims in times of need. Indeed, the insurance industry relies heavily on the mutual trust and long-term relationship built between the consumers and insurance intermediaries. The insurance agent/broker is often the usual contact point for the insured as in most cases, the insurance company may not appear in the picture at all. Nowadays, insurance is viewed not only as a product that provides peace of mind against unforeseeable incidents but also as an important financial planning instrument.With the rapid diversification of sophisticated products in a highly competitive market, insurance intermediaries need constant update of their professional knowledge as well as high business ethics in order to meet rising consumer expectations. The quality of insurance professionals has made significant progress in recent years since the introduction of the “Insurance Intermediaries Quality Assurance Scheme” in 2000. The Scheme comprises a system of qualifying examinations to control the quality of new entrants admitted to the profession and a continuing professional development programme to enhance the professional knowledge and ethics of the practising professionals. However, gaining consumers’ trust and establishing mutually beneficial relationships may require one step further, and that is corporate social responsibility. It is important to understand the difference between “helping a consumer buy something” and just “selling him something”. Insurance intermediaries need to truly understand consumers’ needs and figure out what insurance products will provide them with the most appropriate coverage. Consumers’ trust is gained through provision of choices and unbiased recommendations. On the other hand, misrepresenting a product or aggressively pushing a consumer to take up a policy that does not really suit him will only damage the relationship and eventually lead to decline of business. The Insurance Claims Complaints Bureau received 354 complaint cases in 2007. Application of policy terms, non- disclosure and excluded items are amongst the main categories of complaints. Such complaints and dissatisfaction can in fact be minimized. The general public often finds insurance policies difficult to understand and thus rely on the advice of insurance intermediaries to get a clear understanding of the terms and conditions in the policies and to make informed decisions. In addition to payment obligations and claim limitations, consumers should also be fully and accurately informed of anything that may lead to claim rejection, such as pre-existing illnesses or hazardous sports. Insurance intermediaries should try their best to highlight the advantages, and equally important, the disadvantages of an insurance policy to their clients. Insurance products are increasingly added with financial elements such as retirement planning and children’s education 16 Feature