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What are the Greatest Challenges Insurance Agents face?

Health insurance agents face tremendous challenges on a daily basis that are important to understand.

3 min read

May 30, 2024

OneAssure

The health insurance sector in India is one of the fastest-growing markets in the country. The compound annual growth rate for this sector has been over 20 percent in the past few years and is expected to increase even further. The potential to grow is phenomenal as less than 1 percent of India’s population has health insurance. But this does not mean that selling health insurance is easy in India. On the contrary, health insurance agents face tremendous challenges on a daily basis that are important to understand.

Consumer awareness

Almost 81 percent of the Indian population saves money but less than 12 percent of them are willing to spend it on a financial instrument. We have one of the lowest financial literacy rates in the world. The very concept of health insurance is confusing as a majority of them don’t know if it is a tax-saving tool, medical expenses management tool, or an investment tool. The Indian consumer does not know that health insurance is a necessity, which means that there is an extremely low demand for insurance products. A health insurance agent, therefore, faces the double challenge of first educating the potential customer and then selling the product.

Lead Creation and conversion

Unlike typical businesses, selling insurance depends heavily on finding new leads and converting them. An agent needs to consistently educate the client, which takes time and often yields no results compared to the effort spent. However, the agent needs to be persistent, as health insurance sales are steadily growing each year. Also, every time a previous client renews his or her policy, the agent makes a commission. Thus, despite slow conversation, an agent needs to be persistent and work one’s way upwards.

Poor training

A health insurance agent in India is not equipped to gauge the market and be creative in sales. They are taught the basics of insurance but not the nuances of marketing. They face difficulty in selling policies because they are not effectively trained in understanding the client’s exact requirements and lack persuasive communication skills.

Furthermore, there are a large number of highly complex products in the market which the agents themselves do not completely understand, let alone comparing the nuances of multiple similar products. This means that they cannot effectively explain the products to the consumer and hence fail to convince potential leads to buy.

Regulatory constraints

A health insurance agent in India cannot be affiliated with more than one insurance company unless they operate a brokerage firm. This means that they have limited products to sell in the market, even when there are numerous products they can sell with the same training. A potential client may find a better product with some other company that the agent cannot sell. This implies not only the loss of a client now but also the loss of a potential lead through referrals.

Adapting technology

In times of increasing Internet penetration, agents need to adapt technology more. This not only reduces paperwork and unnecessary hassle, it also allows the agent to stay up to date with current trends and service clients better. With modern smartphones, embracing technology has also become easier and more intuitive.

An insurance agent should also be active on social media. With apps like Facebook, WhatsApp, and Twitter; digital outreach and networking can exponentially build one’s clientele. Building social media presence takes time, and requires the agent to be genuinely interested in interacting with other people; and can yield great long term benefits.

Health insurance agents can also use new age Customer Relationship Management (CRM) software like OneAssure which resolve many of these challenges in a seamless manner. A CRM software typically comes with features like contact and lead management, report generation, workflow management, and social media and email marketing to empower an insurance agent to use technology to its true potential.

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