Insurers must hold their third-party agents to account for the sake of the protection industry’s collective reputation, LifeSearch’s chairman has said.
At the LifeSearch awards lunch this week (March 2), Tom Baigrie addressed a room full of insurers and shone a spotlight on the sales tactics their agents use to generate non-advised life insurance sales.
As “gatekeepers” to the protection industry’s collective reputation, he asked insurers to “test the telephony behaviours of their agents that they support financially”, and to “hold those agents to account” who are committing “gross breaches” of Ofcom rules.
In a report published by Baigrie’s firm after the awards, it mentioned instances where mystery shoppers it commissioned were “inundated” with follow-up calls and voicemails from salespeople trying to keep a lead alive after a consumer had entered their details via a free quote tool.
In some cases, it said mystery shoppers received multiple call backs each hour, with one receiving 20 calls in the space of a single day. And even when an agent was told to stop calling, in some cases they did not.
The report also cited instances of “pressure tactics” used by agents to make consumers think they had a limited time to secure a certain amount of cover.
It also gave examples where a salesperson said more expensive policies would provide additional peace of mind – whether it was necessary or not.
Agents were even found to have made factually incorrect statements to keep a customer on side. One case saw an agent ask a customer for a financial “commitment” to pay for their medical report despite the fact it is the insurer which pays for this.
“How many people have fled from protecting themselves because of that experience; what must they think of a market that allows it?” Baigrie asked. “Insurers need to accept that they are the gatekeepers to our collective reputation.”
Baigrie asked insurers to test their agents for themselves. “It’s easy to test: just leave a phone number on a website and do not answer the calls that follow. I’d use a burner phone if I were you.”
Bearing in mind the culture prevailing among non-advised tele-sellers, Baigrie said: “It has to be the insurers – who do pay and enable their agents after all – who accept responsibility for protecting our collective reputation by refusing agencies to sellers who harass consumers.”
He asked all insurers to require a disclosure from their non-advice telesales agents of their regulatory status.
He also asked insurers and reinsurers to accurately record which sales channels their customer come through, for example, whether it was online or via a human interaction, and whether it was an advised or non-advised purchase.