A file photo of the Merlion statue in Singapore. — Bloomberg
SINGAPORE: Whatever they are called – insurance agents, financial advisers, brokers and even banks – all play the role of a middleman.
And, save for banks that also offer many other products, they have one common purpose here – to sell insurance policies of one kind or another.
These middlemen can be very helpful to consumers who can get bogged down by the many terms and conditions of policies they are interested in, be it a whole life participating plan, a yearly renewable travel policy or a short-term endowment plan.
They can also alert busy consumers to new financial products in the market.
So when consumers find responsible middlemen, there is a tendency to stick with them.
But make no mistake, the existence of the middlemen is built on the need to sell. This is where things can go wrong, as I experienced in early September.
A third-party telemarketer made a cold call to promote an insurer’s Integrated Shield Plan (IP). This is private health insurance coverage in addition to the national health insurance scheme MediShield Life in Singapore.
Our conversation flatlined upon my questioning – claims were made, incorrectly, that the government has been urging people to get IPs in recent years.
One could argue, at the very least, that the telemarketer was ignorant or that she was simply trying to get me to make an appointment with a financial consultant who would explain the product.
Most likely, she was just out to sell, sell and sell at all costs.
To be clear, MediShield Life is sufficient to cover most public hospital bills.
In mid-July, Health Minister Ong Ye Kung said the national scheme is designed to cover nine in 10 subsidised public hospital bills, with very little or no out-of-pocket payment by the patient.
What soon came in mid-October was the announcement that MediShield Life claim limits and premiums would rise from April 2025, as a result of rising healthcare costs.
In September, almost all insurers jacked up the premiums of IPs and riders.
Based on the timeline of events, the telemarketer was likely tasked to sell IPs before their premiums increased, which would make it harder for consultants to push the products.
Of course, consumers have to carry out their due diligence so they would not be misled.
But any middleman who provides incorrect or misleading information, whether intentionally or not, is eroding the consumers’ trust in the local insurance industry.
A report released on Nov 14 found that consumers’ trust in life insurers in Singapore moved up a notch to 70 points in 2024 from a score of 68 in 2023.
Consumers’ trust in agents and financial advisers remained unchanged at 73 points, while the confidence levels of small and large businesses in general insurers and their intermediaries dipped.
The report noted that the scores in all categories are still strong.
The study, commissioned by the insurance culture and conduct steering committee, identifies areas where consumers’ and businesses’ trust in the Singapore insurance industry can be improved.
These scores show that the industry’s efforts over the years to get the house in order have yielded some positive results. — The Straits Times/ANN
