Insurance brokers clueless about their products

A SENIOR financial adviser yesterday made a call for a minimum educational requirement for persons entering the industry. The call was made after the realisation that almost 70 percent of the existing insurance agents do not understand what is contained in the insurance policies they sell. In addition, it was revealed that less than two percent of the employees in the sector are involved in self-development through training and education. This was just one of the areas in the insurance sector in urgent need of improvement, if the sector is to move forward with the country to first world status, according to insurance professionals at yesterday’s breakfast meeting on insurance brokers and adjusters, hosted by the Central Bank. Bertrand Doyle of the Association of Insurance Adjusters explained that there were many insurance adjusters and brokers in the business who have been employed for over 25 years, and who are not aware of where the sector is today. 

He explained that they attended classes before getting into the business and, as soon as they got their licence and it was no longer compulsory for them to attend training sessions, their self-development came to a standstill.  He said many of these people just pay their licence fees every year and continue to practice, unaware that things were changing and new developments were being made. Many of them, he noted, still functioned on the old rules, some of which he helped design over 20 years ago. Doyle also noted that a market survey should be conducted of existing managers to get a better idea of the type of training and personal development they have been exposed to over the last five years. He said such a survey would show that many of these managers do not engage in developmental training and knowledge-based courses to improve their understanding of the business.

He said this was a means of getting people to join an association, so that they can garner necessary documentation on the status of the industry and developmental training required to remain on top of the field. Echoing this concern was Dennis St Bernard with Risky Business Ltd, who pointed out that surveys had shown that less than two percent of the people in the business were involved in any form of developmental training or continued education. He noted that developmental training was something that should be made mandatory, and which would strike at the very core of regulation. Another issue raised by brokers at the meeting was that of “suitcase brokers,” who come into the country and do business without even registering with the relevant authority before doing so. Dr Shelton Nicolls, Deputy Governor of Central Bank, explained that discussions have been held on harmonisation relating to registration arrangements to be put in place, but to date nothing concrete has emerged from Caricom.

He said he was hoping that in time there would be a general law governing the industry, especially with the CSME coming on stream. Meanwhile, Nicolls said, countries would have to make use of the laws governing the industry in their home countries. Doyle called on the Central Bank to recognise the Association of Insurance Adjusters so that the wider sector would take them seriously, and so they could play a vital role in setting policies and guidelines that the industry was required to follow. He also called on the Central Bank to “force” insurance companies to join the association. Central Bank Governor Ewart Williams said while the association was a necessary addition to the sector, it was impossible to force people to join it. He said the association needed to find ways to encourage others to join through advertisements, brochures and training sessions.