Kathmandu. If we look at the data up to the third quarter of the current fiscal year, 68,855 life insurance policies have been surrendered. Life insurers have paid around Rs 10.5 billion to the insured for these repairs. However, both the number of surrender policies and the amount paid decreased compared to the same period of the previous fiscal year.
It is not only inconvenient for the insured but also for the insurer to take an unpleasant decision to close the life insurance policy before the expiry of the life policy. Both the insured and the insured suffer a loss if the insured has to pay the insured from the amount of the insurance fund before the maturity of the term of the policy.
Neither the insured nor the insurer expects to close the life insurance policy before the expiry of the period. When the insurer pays the amount ahead of time due to the commission, regulatory fees, management expenses, etc., given by the insurer to the agent for the sale of the policy, the insurer should pay such expenses only after deducting such expenses. In such a situation, if the amount deducted by the insured is more than the bonus amount, then only a small amount will be received by the insured.
Strategies should be adopted to meet the needs of the insured, build trust, ensure transparency, and maintain regular communication to minimize the surrender of the policy before the predetermined maturity date. Here are some suggestions on how insurers and agents can make efforts to reduce insurance premiums:
Understanding and addressing customer needs
Emphasis on Insurance Education: The benefits, terms, and long-term value of the insurance policy should be provided in a simple and clear way.
Personal insurance policy: should be designed according to the customer’s life stage and financial goals and encouraged to purchase insurance policies accordingly.
Be proactive in problem solving: Insured’s complaint should be addressed promptly and effectively.
Regular communication with the customer
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Regular Information: It is advisable to use email or SMS to send updates, updates, and reminders of the insurance policy.
Periodic Review: The review should be offered to optimize the insurance policy based on the client’s life circumstances.
Customer Service Improvement: should provide an easy service system to respond to customer inquiries promptly.
Build trust and transparency
Clarity: Insurance documents should be simple and easy to understand.
Claims Process Improvement: Insurance claims should be processed easily and transparently.
Do not force sell: should be advised to choose an insurance policy only after understanding the customer’s actual needs.
Provide flexibility
Flexibility in Premium Payments: TAG_CLOSE_span_103 Please be made aware of the various options or grace periods available for insurance premium payments.
{{TAG_OPEN_span_102}TAG_CLOSE_span_102} Facility to modify insurance policy based on a change of life (e.g., marriage, birth of a child, or retirement). This service is not available in the Nepali insurance market.
Option to suspend insurance: Facility to temporarily suspend insurance policies in case of short-term financial problems. Such a facility is also not available in Nepal.
Incentive for customer continuity of insurance policy
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Loyalty Rewards: Provide discounts, bonuses, or additional benefits to customers who maintain a long-term policy. Lately, TAG_OPEN_span_98 some life insurers have introduced the concept of loyalty bonuses.
No-Lapse Benefits: provide additional benefits or some discount on premium payment to the insured who has not covered the policy.
Referral Program: Reward the insured who brings in new customers.
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Digital Tools: Make it easy to pay and revive insurance through the mobile app and online portal.
Data Analytics: Analyze customer behavior to identify insurance or other types of risk.
Send Personal Information: Notify us about the insurance premium payment date, policy term, or benefits.
Get direct feedback from the customer
Get feedback: Take a survey or interview to understand the reasons for discontinuing insurance policies.
Exit Interview: Talk to the insured who surrendered the insurance policy to identify ways to improve.
Promote long-term benefits
Financial Planning Guidance: explain how insurance can be incorporated into a long-term financial strategy.
{{TAG_OPEN_span_86}Example Display: Demonstrate the benefits of an insurance policy through a successful case study and message.
Provide additional service and bundling{
{{TAG_OPEN_span_84} Cross-selling opportunities: offer different types of insurance (such as health, life, and auto insurance) in a bundle.
Rider and Additional Services: provide additional risk coverage on the insurance policy as per the customer’s needs.
Pay attention to agent training
Empathy and Ethics: Provide training to prioritize the needs and well-being of TAG_CLOSE_span_81 the insured.
Measure insurance continuity: Make the continuity aspect of the insurance policy the main indicator when evaluating the agent’s performance.
These measures can help prevent premature surrender or closure of the policy by making the insured feel satisfied and trustworthy.
