In a seemingly dynamic and complex insurance industry, direct insurance is often perceived to be transparent and easy to derive benefits from just as when acquiring insurance through a broker. Research has however, revealed a completely different response to that view especially when it comes to the transparency and certainty of the benefits as so promised by the direct insurer. You could now be wondering what I am trying to imply about direct insurance!
Direct insurance in simple terms is the act of a client going ‘directly’ to an insurance company to acquire insurance cover rather than through a broker; this being done with the perception that direct insurance is cheaper, easier and more transparent. However, research has shown that this is not true but is ‘just a direct insurance myth’. This is because the claims rejection rate among direct insurers has proved excessively higher than that done through a broker.
The observation over time has been that there are some concerns on the level of underwriting undertaken by direct insurers at the point of sale as compared to underwriting at claims stage. The tendency is for the direct insurer to perform additional underwriting checks at claims stage, with the result being that their claims rejection rate climbs way in excess of the intermediated insurance experience.
The checks and balances in the intermediated insurance industry have thus proved more rigorous as intermediaries are on hand to contact clients in the event a payment is missed hence making it much more difficult to lapse a policy when insurance is intermediated. On the other hand, direct insurers tend to automatically lapse policies in the event the insured misses consecutive premium payments and failure of the insured in understanding the small prints on the policy schedule (which the broker is fully inscribed to).
It has been proved that a client cannot make an informed decision based on superficial information as so presented by direct insurers. This is the very essence of disclosure, the conducting of a needs analysis and the provision of recommendations during advice stage. Disclosure should ‘principally’ not happen at the claims stage and most often the client needs protection against his or her own ignorance rather than advice given through direct insurance.
Given the foregoing, it becomes prudent to acquire insurance via a professional broker who offers an in-depth financial needs analysis, consumer education and support for you during the underwriting and claims process. In this regard, Capitol offers complete disclosure of pertinent issues, transparent claims procedures and a personal approach to your needs. The singe most important factor is the special personal relationship that exists between us and the client which is bound by our willingness to go the extra mile and ability to apply our knowledge and experience to your advantage. Therefore, insure with Capitol for you to derive the satisfaction of insurance that is neatly packaged, just for you!