Jiyo Healthy!

KS Sankar

Hello readers,

Thanks for a great response.

We would like to introduce Mr. KS Sankar. Mr. KS Sankar, who heads Branding Initiative at Medimanage is one of the last words on Insurance in India.  He has a rich experience of close to 30 years in the Insurance Industry.

We invite more questions on varied aspects of Insurance, which he would be glad to reply. You can use the comment section below to ask your questions.

Here’s a question that was asked on LinkedIn, which he has answered below.

 (Q): Payment of Agency Commision/Brokerage in Insurance ?
When an investor purchases mutual funds w.e.f. 01-08-2009 he is not required to pay any commission to any intermediary/agent/financial advisor. Don’t you think that like wise when you purchase life or non-life insurance or pay renewal insurance premium as an insurance consumer, should also:-

(1) Not be required to pay any agency commission/brokerage like MF’s

(2) Not be required to pay any agency commission/brokerage, when purchased directly from office of insurance company or an employee of insurance company or internet. Should you also not get direct discount in premium or pay less premium since agent/broker is not involved ?

(3) Don’t you think IRDA should immediately issue instructions in this regard ?

Location specific: India

(A): Despite being a part of the broking fraternity – or, should I say, ‘Gandhi’ (the film) style – especially because I am a part of the broking fraternity, my answers are the same as those of Pran. (Pran & I do not differ on too many points – like IRDA should be IDRA & Insurers should develop a ‘feel’ for the risks..).
A broker’s role is not merely that of an intermediary who brings the insurer and insured together. The role is more that of a consultant, who, through interactions with the insured, makes a proper risk assessment and presents the risk in clear perspective to the insurer/s so that the underwriting and pricing (premium) are scientific and a perfect fit to the risk. The current remuneration pattern makes the brokers glorified agents, not to talk about Prahlada’s valid concerns. And the only benchmark for the brokers’ performance, in most cases, ends up being the ability to obtain the L1 quote..
The silverlining – There are corporates who use the brokers only for the domain expertise they bring to the table and source the quotes directly from Insurance companies. We, at Medimanage, are proud to have played this role with several corporates – like providing a product and process structure solution to an ultra-large multinational ITES company – a solution that was evading them for years until we were given the opportunity to work on the same. Why, for another ITES company, representing the Company we interacted with other brokers, (despite our being brokers ourselves) to ensure the product fit. The other brokers were sourcing the quotes and we had validated the quotes in terms of coverage, wordings – in short, the works.
So. 1) Yes. 2) Yes & 3) Yes. Let brokers be paid for their grey cells than contacts.
Clarification added 17 minutes ago:
And, Laxman Prasad, it is not that Medimanage grey cells are available only to Corporates. Do wait till my Online Portal is launched, thru’ which you can buy your individual health policies and other health products and services – As co-incidence would have it, Gandhiji is here too.. The target launch is on 2nd October – You will find so much of content in it to help you take an informed purchase decision that you will happily pay me a fee !!

Tags: Agent, Brokerage, Commission, Financial Advisor, Insurance, Intermediary, KS Sankar, Linkedin, Mutual Funds