FSA criticizes insurance cold-call practices
After examining the way that 43 insurance companies sell their policies over the telephone, the Financials Services Authority has told the industry that they must improve their “cold-call” methods. The inquiry included questionnaires to all the firms, visits to some of them as well as scrutiny of nearly 300 calls made by sales associates at 19 of the companies.
A spokesman for the FSA said that the quality of the cold calls was disappointing in the sales of general policies, and that benefits of the product were sometimes exaggerated during the calls. The FSA also found that sales associates often put pressure on those they called to make an instant decision on whether to purchase the policy being offered. The worst offenses were found when the cold calls were about health and sickness insurance and personal accident policies.
The FSA also looked at how sales associates conducted themselves when customers called the companies to ask about their policies, and found that in general the sales approach was good but that in some cases the limitations and exclusions written into the policies were not explained adequately. All the firms in question are now in the process of improving their methods of selling insurance over the phone, according to the regulatory agency.