Sale of insurance policies by banks should be regulated - report

Sale of insurance policies by banks should be regulated - report | Insurance Business

Sale of insurance policies by banks should be regulated - report

Comparison website MoneyHub is calling on banks’ practice of touting financial products, particularly cross-selling insurance policies, to be regulated.

“MoneyHub has heard from New Zealanders nationwide who have been pestered at banks when it comes to being offered insurance,” it said. “We want to bring this situation into the public domain to get the banks to stop this behaviour, or at least give the customer the right to never be asked.”

MoneyHub said banks that push their staff to sell insurance during routine customer reactions, come off “annoying” to customers. This, it says, calls for regulation of banks to offer an opt-out policy to discontinue “nuisance pestering.”

“Bank tellers asking customers if they want insurance is not only a nuisance, it is a massive security risk too,” MoneyHub senior researcher Christopher Walsh said. “If a customer agrees to get an insurance quote, very personal details will be asked over the counter, such as income, address, family situation, job title, other sources of income – and anyone can be listening to these answers.

“If I’ve told the bank my salary and living situation, as well as my assets and debts, I have no control of who heard that, what the bank will do with that information and what a stranger can do this with information as well,” he explained.

Walsh said banks are likely pushing their staff to meet sales targets, with insurance indiscriminately offered without full consideration of whether a customer needs the product or can even afford it.

MoneyHub also quoted First Union’s recently published survey data, which confirms that, overall, 87% of respondents reported feeling pressure to sell financial products; and 92% feel the same or more pressure to sell financial products than they did a year ago (50% more; 42% the same). The survey results suggest it is profits before people on planet bank.

“We want to make the banks aware that most of their customers are not interested in being cross-sold insurance when they visit a branch, and we want the customers to be offered the right to be excluded from a sales pitch,” it added.

Do you think banks should be allowed to sell insurance policies over the counter in this way? Leave a comment below with your thoughts

 

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