Kathmandu. Not only the insured but also the insured has to take an unpleasant decision to close the 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 time 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 received by the insured, then only a small amount will be received from the insured.
Strategies should be adopted to meet the needs of the insured, build trust, ensure transparency, and maintain regular communication to minimize surrender before the maturity date. Here are some suggestions on how insurers and agents can make efforts to reduce insurance premiums:
1. 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 manner.
Personal Insurance: Individuals should be encouraged to design policies according to the life stage and financial goals of the customer.
Be proactive in problem solving: The insured’s complaint should be addressed promptly and effectively.
2. Regular communication with customers:
Regular information flow: It is advisable to use email or SMS to send reminders about the benefits of the policy, updated details, and more.
Periodic Review: A review should be offered to customize the policy based on the client’s life circumstances.
Improve customer service: Provide an easy service system to address customer inquiries promptly.
3. Build trust and transparency
}
Clarity: The insurance document should be simple and easy to understand.
Improve the claims process: Insurance claims should be processed easily and transparently.
Don’t make forced sales: It is advisable to choose an insurance policy only after understanding the customer’s real needs.
4. Provide flexibility
Flexibility in premium payment: Be made aware of the various options available for premium payment or the grace period.
Facility to modify the policy: The facility to modify the policy based on a change in life (such as marriage, childbirth, or retirement). This facility is not available in the insurance market of Nepal.
Option to Suspend Insurance: Temporary deferment of insurance policy in case of short-term financial problems. Such a facility is also not available in Nepal.
5. Encourage the customer to continue the insurance policy
Loyalty Rewards: Make discounts, bonuses, or additional benefits available to a customer who maintains a long-term policy. In recent times, some life insurers have introduced the concept of loyalty bonus.
No-lapse benefit: Offer additional perks or some concessions or other discounts on premium payments to the insured who have not spent the policy.
Referral Program: Reward the insured who brings in new customers.
6.Use technology
Digital Devices: Make it easy to pay premiums through mobile apps and online portals.
Data Analytics: Analyze customer behavior to identify insurance closure or other types of risk.
Send Personal Information: Inform about the insurance payment date, the term of the policy, or the benefits.
7. Get direct feedback from customer
Get feedback: Take a survey or interview to understand the reasons for discontinuing your policy.
Exit Interview: Communicate with the insured who surrenders the policy to identify ways to improve.
8. Promote long-term benefits
Financial Planning Guidance: Explain how insurance can be incorporated into a long-term financial strategy.
Illustrative demonstration: Demonstrate the benefits of an insurance policy through successful case studies and messages.
9. Provide additional service and bundling{
}
Cross-selling opportunities: Offer different types of insurance (such as health, life, and auto insurance) in bundles.
Riders & Additional Service: Facilitate additional risk coverage on the policy as per the customer’s requirement.
10.Pay attention to the agent’s training{
}
Empathy and Ethics: Train the insured to prioritize their needs and well-being.
Measuring Insurance Continuity: When evaluating an agent’s performance, make the continuity aspect of the policy a key indicator.
These measures can help prevent premature surrender or closure of the policy by making the insured feel satisfied and trustworthy.
