Banks, Insurance, and Burnout: The Hidden Cost of the Bancassurance Model
The bancassurance model, where banks sell insurance products to their customers, has become increasingly prevalent. However, this model may have hidden costs, particularly concerning employee well-being and the potential for mis-selling. In this opinion piece, we explore these issues and propose solutions.
One of the primary concerns is the impact on bank employees. The pressure to meet sales targets can lead to burnout and high attrition rates. Employees are often incentivized to sell insurance products with high commissions, which can create a conflict of interest. This can happen when the complex nature of these products and their terms can make it difficult for employees to fully understand and accurately explain them to customers.
This image is a general stock photo to illustrate the subject of insurance.
To mitigate these challenges, it is worth considering how insurance is sold. One potential solution is to limit the types of insurance products banks can sell. Permitting banks to sell only term plans, for example, could reduce the complexity and high commissions associated with traditional plans. Term plans are generally simpler, more straightforward, and often provide better value for customers. This approach could lead to fewer instances of mis-selling and lower employee attrition levels, ultimately benefitting both the bank and its customers.
By addressing the potential downsides of bancassurance, the financial services industry can strive for a more sustainable and customer-centric approach. This will ensure that the banks and employees serve the best interest of their customers, as well as their own.
