Insurers’ staff training limited and lacks insurance detail, report finds

Insurers’ staff training limited and lacks insurance detail, report finds

Insurers’ staff training limited and lacks insurance detail, report finds ASIC has called for home and contents insurance sales staff to receive tailored, ongoing training after its review found that some insurers delivered limited training with courses that focused on sales techniques and lacked detail on insurance.

In one case, the regulator found that an unnamed insurer provided only brief product training and included minimal reference to the product disclosure statement (PDS). The same insurer had a stronger focus on making sales and guided staff to the insurer’s ‘help system’ in order to teach themselves on the job.

The regulator’s report entitled “Review of the sale of home insurance” analyses data from 12 insurers, representing 30 home insurance brand, over six months last year and aims to understand the information that consumers are receiving about home insurance at the point of sale and to encourage insurers to adopt practices that reduce the risk of consumers buying insurance that does not meet their needs.

The report found that while all insurers had guidelines and procedures for training and monitoring staff, some training programs were limited to new staff inductions and did not provide ongoing training; training was standardised across all home insurance brands although the products differed; and programs varied in length – with some being a few days, and other a few weeks. Some programs even lacked detail around insurance and the PDS.

ASIC pointed to one anonymous insurer who issued the same generic training guides to multiple home insurance brands, providing general guidance as to what needed to be covered in the training, “but left it to the facilitator to ‘fill in the blanks’ and tailor the training to the specific brand” even though the home insurance brands were not offering similar insurance.

Some insurers provided staff with training and development modules on the risks of underinsurance, the benefits of calculators and training on specific insurance feature’s but telephone sales staff failed to incorporate this on calls – even when asked by the consumer.

ASIC suggested that training and development could be provided to sales staff on an ongoing basis and updated regularly to incorporate important compliance and/or product changes.

It noted that training could be more tailored to individual insurance products and features, warned against shorter training programs that “may be rushing through the content of training too quickly”, and urged for training and development content to be better  incorporated into telephone sales scripts and evidenced in telephone sales calls.

ASIC found that most insurers failed to set out what measures or steps should be taken if a breach or issue identified. It called for clearer ‘next steps’ once a breach has been identified and reported.

Overall, ASIC said, methods of training were “appropriate and a variety of delivery methods were used to encourage staff engagement and promote practical learning”.

Lack of insurance knowledge

ASIC also released a separate report that detailed consumer interaction with insurance companies and gave information about their experiences using a sample of 400 random phone consultations alongside online content to draw conclusions.

The report details an overall lack of insurance knowledge that permeates through Australia.

“In general, consumers knew very little about the details of their home insurance policy,” the report said.

“The current disclosure system operates on the presumption that consumers with little or no knowledge will recognise the need to adopt a search and information gathering strategy, during which they compare detailed PDSs. The research has shown that this is a false assumption.”

“Consumers used the phone ‘to talk to a human’ because they wanted to consult, clarify or verify. In some cases, the consumer was able to do this by asking the call centre operator questions about the policy.

“Some insurers did what consumers called ‘tailoring’, which was to ask a great many questions of the consumer, in one case asking them to obtain a tape measure to measure the length of the house.

In another, the staff member looked at the property on the Google Maps website during the call, and emphasised to the consumer the proximity of trees to the property.

Several consumers said that they found this process too lengthy, but also useful in that it made them think about their risk.”
  • GJL 29/10/2014 9:36:56 AM
    Just go's to show that Cash Flow underwriting is alive and well. It's also happening in Broking where the 'Nationals' are only concerned with 'shareholder return', both parts of the Industry are moving away from the core values of 'Underwriting & Claims' and 'Service & Value'
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  • SJG 29/10/2014 10:15:44 AM
    As an insurance professional with over 20 years experience I was appalled at the way I was treated by my home insurer recently in relation to a claim for damage to my home. A builder was appointed to make policy response decisions and when challenged could not provide meaning information as to policy terms and conditions. Referral to claim's staff for a review of the information provided was met with the same lack of insurance knowledge. Ultimately I requested the matter be referred to IDR at which time I was contacted by an employee from another part of the FSP organisation who admitted he had no General Insurance qualifications.
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  • DSW 29/10/2014 1:21:17 PM
    I am in the process of reviewing a number of direct insurers PDS's and note that there are substantial variations between the different levels of cover offered per insurer let alone from one insurer to another.
    With PDS's ranging from around 60 to 160 pages, I can guarantee a prospective client without a background in insurance or the law would never be able to clearly understand the level of cover they were buying or whether this cover is appropriate for them.
    Add to this a general lack of product training in the insurer call centres as identified by ASIC and proven by some calls I have made and you have all the ingredients required for the insurance industry to continue to be criticised for its ongoing lack of professionalism.
    As an example I was advised by one insurer that the Home policy I was interested in covered Strata properties. This was plainly incorrect but it took two levels of supervisor referrals before I spoke to a senior manager who admitted the advice I had received was incorrect.
    The aggregator call centres are as bad, if not worse. Everything is about price and you are left with the impression, if you believe their staff, that all insurance is the same, only the price differs.
    I have worked in general insurance for many years and I despair at its current direction. Regrettably the Fed Govt appears to be out of touch with what is actually happening on the ground. Hopefully this ASIC Report will give them pause for thought about some of their recent announcements.
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