Archive for the ‘Insurance Matters’ Category
Bancassurance is killing the Insurance Industry
Insurance in the Philippines is still very Raw despite the fact that insurance was already present in our country during the Spanish era. Maybe due to politics and misleading the public to wrong information lead the entire nation to ignorance in Insurance. In fact, one insurer said that only 13% of the Filipinos today are insured! With the percentage provided, i don’t think our insurance industry is ready for Bancassurance yet. But as early as year 2000, our country was already engaged in bancassurance or the selling of insurance products via bank because they are hungry for the volume reach of the banks and vice versa.
Why do i say, we are not yet ready for this? Because we have to fortify the grounds of insurance first in our country. Make every citizen aware of the benefits of insurance first. So that our citizens will value Insurance as a whole and protect the interest of both parties. Meaning the insurance companies can earn profitably and the assured will benefit wholly on their maturity dates or in non-life, the assured will be paid correctly during claims. Unfortunately, we always advance to the next level without really mustering the current level. Our insurance industry has so many loopholes that an ordinary citizen can fabricate stories and file for a claim easily. No strict policies that is why the industry is so vulnerable to losses. I believe insurance in Manila is one of the most abused things besides senior citizen discounts and credit card coupons!
In other leading nations, assured does not want to file a claim on their car insurance because for every claim, their rates increases the following year, every traffic violation, their rates increases.Because they have a concrete system and they know the consequences, bancassurance will work for them. Here, we don’t have the system yet, people abuse insurance, so banks can not sell for the insurance company or the brokers. As a whole, they are just killing the industry. How can the insurance sustain the business even if they have volume if a catastrophe strikes again just like Ondoy, where will they get the amount to pay the assured if they are dropping the rates? We, Filipinos forget easily.
The ugly truth why banks and small insurance firms sell cheap insurance
Since we started this company, insurance premiums for cars keeps going down the allowable rate set by the Insurance Commission. Besides the fact that it is a cut throat industry, it has so many more factors why the rates are still down sloping.
1. Assured are misguided and mislead. My companies vision is to re-educate the insuring public; i have written this and said this since we started. Pinoys don’t understand insurance! Pinoys have many wrong informations about insurance, be it Life and non-Life. Why? because Pinoys loves tsismis, they hate to educate themselves with facts. They buy because its cheap, they buy because its their cousin or sibling who sells them insurance, they buy because the bank says so. Pinoys don’t understand the logic and the context of insurance. Once we start to learn more about insurance, we will know the value of it, why it should’t be bargained. The sad truth about this is that Insurance might be the last priority our government that is why we have poor insurance law. This is also one of the reason why lots of people suffered when their insurance companies shut down or the insurance firm is a fraud itself.
2. Unlicensed Call Center Agents. Because of its cut throat nature, big insurance brokerage and car dealerships go in to the call center method. They hire unlicensed ( doesn’t know anything about insurance) call center agent to call prospects and give the lowest possible rate without even determining if their prospect is high risk or not. Shot gun approach so to speak. They just fax and call and rely on the lowest rate that they gave. Try calling them and ask question, for sure they will answer you nothing! Nothing related to insurance.
3. Bank Managers got insurance quota. Since insurance is a pre-requisite for a loan, bank managers are given insurance quotas and so the branch manager doesn’t care of the insurance underwriting code and drops the rate. The sad thing here is that you thought you got a good deal, unfortunately the bank just used your insurance premium payment to earn more money for themselves. And try calling your branch manager while your house is burning or if you got into an accident, they might not know what they sold you worst they might not answer your call!
4. Mediocre Insurance firms. Why would a legitimate insurance company sell low insurance premiums and pay huge amount in claims? If the answer is to serve the public, then it is not an insurance firm, it is a charitable institution. They should partner with PCSO and not IC. There is no such thing, there is always a catch why they sell below the market rate! it is either you have been fooled by the sales agent or the mediocre insurance firm has other agenda. Its either they need cash flow to pay their debts or they are just plain stupid.
5. Car Dealerships extra income. I used to be a car salesman and during that time, selling insurance is my 2nd source of income. Nowadays, most car dealerships can’t share insurance commissions to their agents already. Why? because it is a cut throat industry. So they have no option but to compete with the market and drop their rates.
6. Volume means Power. In this industry, if you sell volume then the insurance company is at your mercy. Sad to say but most NON-LIFE insurance companies in the Philippines has no pride at all. Imagine BDO, the largest bank in the country today, sells for an insurance company, just a prerequisite for a loan whether its a business loan, housing loan or car loan, imagine the volume that they can produce with all their branches. Millions, hundred of Millions worth of insurance premiums! In this case, whatever rate they ask they will receive because the genie is in the bottle. Insurance company will kneel to them and kiss their asses because that’s a lot of money. But then again, Insurance has principles, warranties and clauses…but was already bought by money.
Read all 6 factors again, all i mentioned their was selling, none was about service. Insurance is not only about selling but after sales service. Those who sold cheap insurance to you will not show up when you need them the most, guaranteed! Why? they did not earn from you so why would they waste time? With responsible insurance agencies like us, your insurance experts, we might not be able to beat their prices but we guarantee our after sales service. I personally trained my people to talk with sense; to advise our clients their options, we take time and we analyze what is best for them when they need us the most! Then, our clients reap the best savings from their insurance. I really wish that our government will soon look into the insurance industry and implement strict laws and regulations that will protect the public in general because i dont want it to be ironic.
Always trust your legit and responsible insurance agents and brokers. Di bale na mas mahal ng konti, for sure mas maasahan mo sila when you need them the most. Kung malaki ang difference, think again…you can always choose the cheaper one but don’t give me chance to say this: ” I told you so!”
Help Wanted: Insurance Associate
We are looking for the following:
Insurance Associate: will be based in United Nations Ave. in Manila.
With experience is a plus.
preferably Female 20years old and above, College Graduate.
With pleasing personality.
Knows how to communicate in English (written and oral)
Must be computer literate. (MS EXCEL,MS WORD)
For interested parties: Please send your resumes with picture to jennifer@insuranceexperts.ph. Thanks!
NO MORE OVERAGE FOR LOYOLA PLANS
On March 30, 2011 Loyola Plans Consolidated, Inc the pioneer in Memorial Services, launched its newest product, allowing Filipinos who are beyond insurable to age to purchase memorial services under their own name.
The Gold Memorial Services covers the age of 56 onwards, basically means even if a person is 89, purchasing a memorial plan will no longer a problem. One of the best features of Gold product is it can be paid on an installment basis in 5-year period. Allowing Filipinos to prepare for the inevitable without draining their pockets. My favorite feature is you can now purchase the service without you’re over age and over sensitive parents knowing it. Loyola acknowledged the problem, that majority of Young ones would like to get services for their grandparents, parents without them knowing it. Since, some seniors would not take the buying a nice gesture, today, only the payor signature is required and yet the plan will be under to whom you’re really buying.
Of course, balance must be paid in full should anything happens and the plan must be use. But with add on interest.
Overseas Filipinos, can now also purchase memorial services for the love-one left in the Philippine by simply downloading the application form.
Loyola Memorial Services is also a non-traditional memorial services, which covers a wide range of usage, not limited to casketing. It can be use to pay cremation services, interment fees at any Loyola parks nationwide, or catering services and whole lot more.
In my 15 years as Group Business Manager of Loyola, Memorial Service is an insurance that everyone should have at the earliest possible time. Not because am selling it but because it the only insurance, needed immediately once a love one passes away. A family has only 3 days to come up with at least fifty thousand pesos in cash (P50,000.00) which is by the way the cheapest service in Class A mortuary like Loyola, Arlington, and Funenaria Paz ..If a memorial plan is present, the family will no longer worry about the cost.
For inquiries, email me at licupcherryng@yahoo.com and cherry@insuranceexperts.ph or text 09285061180, 09228254287 and will attend to your inquiries the fastest possible way.
Think ahead, plan ahead
Claiming for your Marine Insurance
These are steps and requirements in claiming for a marine insurance loss. It is said that Marine Insurance claim is one of the hardest and needs fine details of the incident.
Step 1. Notify all parties concerned after the discovery. These includes the supplier and/or shipper, the local trucking service provider and the insurance.
Step 1 is to make sure that your loss will be paid by the guilty party after the investigation. There is a lot of probability to whom the damage may arise.
Step 2. Gather pertinent documents like:
- Arrasstre Operator/Contractor
- Vessel’s owner/Agent
- Other bailees like customs Broker, etc.
- and their respective replies.
- Bad Order Certificate issued by the Arrastre Contractor
- Copy of turn-over Survey of Bad Order on Board cargoes issued by the Arrastre Contractor as attested by the vessel’s representative
- Original laboratory or Quality Control Analysis
- Original Invoice for repair/reconditioning of bad order or damaged items
- Bad Order Certificate
- Turn-over Survey on Bad Order Cargoes
- Short delivery or short landing Certificate issued by the Arrastre Contractor certifying the non discharge of package/s or Tally sheet of Discharge
- Notice of unlocated Cargo files by the Insured’s custom’s Broker against the ship owner or Arrastre Contractor
- Permit to Deliver imported goods
- Turn-over Survey
- Bad order certificate
Step 3 After notifying your agent on Step 1, a marine insurance representative from your insurance company will call you and ask you initial questions and might probably set an appointment with you and to see the damaged items.
As i mentioned in Step 1, the insurance will conduct a thorough investigation of the claim; the insurance may deny their obligation if they found out that the damages came from another guilty party which they will provide you with a comprehensive report that you can use to prove the guilty parties negligence.
Nevertheless, don’t feel bad that the insurance denied your claim, they just gave you a comprehensive report who should be liable, they are not evading the claim but they are just giving you the right to claim from the guilty party. If the insurance report said that the damage is due to an accident or force majeur then insurance will pay for the damages.
Remember, insurance is not a tool or last resort to get your money’s worth. The insurance will always respond to the accident. Guaranteed.
No Documents Claim Process
Is this a fact or fiction? We are in the business for almost 5 years now and we hear a lot of rumors that other agencies can process a vehicle accident claim without pertinent documents required. We hear this from prospects who doesn’t want to try our services.
Personally i can’t understand that. For more than “some” reasons; why would an insurance company who is in the “business” shell out money or pay claims that they are not sure if its a valid claim case or not? If they handle their finances loosely, for sure they will have a financial meltdown just like what happened in the US. I really believe that if the process is corrupted, somebody is suffering or paying for the lapses, probably another paying customer also. There will be an imbalance in finance,sales and budget allocation. Sooner or later, that insurance company will shut down and all of its customers will suffer. Not the agency because the agency can move on to another insurance company. We, Filipinos should start thinking macro, lets stop corruption first with ourselves, the rest will follow and the entire nation will benefit.
We, Filipinos are very much into “palakasan system”. This No Document Claim Process most likely came from a big corporate account of one insurance company and has been passed on wrongly to others. Imagine, if the entire corporate accounts has this VIP treatment, who’s gonna suffer? the individuals who are customers also. Insurance or no insurance topic, we should stop this palakasan system, this is corruption within private civilians. We hate it if our government does it to us but we comprehend if it benefits us. Tsk Tsk, too much selfishness. If we keep on doing this, our country will never be a 1st world country!
Accenture Auto Club Insurance 101 seminar
Its been our 3rd time to hold an Insurance 101 seminar for the Accenture Philippines autoclub. We hope to do more soon. We get to see new faces and new questions every time we have this event. Its fun and at the same time informative for both parties. The first time we did this seminar, the insurance experts agency invited Prudential Guarantee to be the guest speaker then we invited MAA General on the second visit. Now, we have Standard Insurance as the guest speaker. Thanks to Gerald Galang the trainer/comedienne of SICI who made the room lively with his corny antics! Since time is limited, we were not able to answer all of the participant’s questions and we are opening the comment section below for your questions and we will gladly answer all of them here!
We are open for these kinds of seminars for free. Please email me richard@insuranceexperts.ph.
Basic Principles of Insurance.
I’ve been telling this always that Insurance is very young in our country and Filipinos needs to know more about insurance. So as part of my advocacy, please read this first or watch the video presentation before buying your fire or car insurance. This will help you in determining what you are trying to buy is the correct one. “Buying correct insurance is an asset, buying wrong insurance is just an expense!”
What i’ll put here are in Lei mans terms and the one in Youtube are in legal terms.
1. Average Clause- the insurance company will assume that the insured is self insuring his or her property when during investigation of the loss, they found out that the loss is of greater value than the actual loss value. In this case, the insured shall be considered as being his own insurer for the difference and shall bear a ratable proportion of the loss accordingly. Example: Insured amount 5M, Actual investigated loss 10M, the insurance will pay the insured 2.5M which is 50% of the your sum insured. Remember that the insured is paying annual premiums and most of the time, the reason why they lower down the property’s value because they wanted to have a lower annual premium.
2. Principle of utmost good faith. The insurance requires full disclosure from the customer. Insurance will accept any value that you will declare with your property, they should not and would not debate on how much it should be because as the owner of the property, you know better. For your information, this can also be a ground for denial of claims.
3. Principle of Insurable Interest. A customer may only insure properties that is his or hers via legal documentation. There is no reason for someone to pay annual premium that is not his or hers unless they plan to do something fraudulent. For instances that you buy a second hand vehicle and prefers not to change ownership on your name, make sure to let your insurance agent know that so he can put a “paid by: your name” in the policy and give him or her copy of your deed of sale. This will save up lots of time in future claims processing.
4. Principle of Indemnity. The assured should always act and protect its property as if it is not insured. For example, you got hit by a bus and you had the chance to go after it, you should. Even just to get the plate number and bus company’s name so that your insurance company can go after them which is explained in number 5.
5. Principle of Subrogation. Insurance’s right to recover from the losses it paid to its assured from the liable third party.
6. Principle of contribution. Any individual has the right to assign multiple insurances to his single property but during a claim, insurances will share a rational proportion from the losses. Example: Your building is worth 10M and you purchased 4 insurances on different occasions at 10M each. At the time of loss, the 4 insurance will for sure talk to each other pay the ratable proportion. This prevents frauders to earn from insurances.
7. Principle of proximate cause. Insurers will only pay you for the perils you paid for. Even if you have a “comprehensive” insurance it doesn’t really mean that you are covered for everything. So you really have to be careful and detailed with your insurance agent to get the correct insurance for your property.
If you are interested to have your properties covered with the correct insurance, please feel free to give us a call. Contact us at 02-7245140. Well be glad to explain further.
Disclaimer: The clauses and principles are derived from the insurance code of the Philippines. The meaning and description provided in this blog is the personal explanation of the author. Insurance decision will still prevail and the author should not be liable for any decisions or outcome your current claim should arise from. This blog is purely for the purpose of expressing the authors passion with non-life insurance and its business.
Fair Market Value vs Actual Value
Yesterday, we got a phone call from a stranger. He wanted to ask if the decision given to him by Fortune Insurance after a Total loss was fair or not. Here is the case:
Mr. Insurance customer insured his 2004 Volvo S60 for P1,500,000. He got into a major accident and Fortune Insurance declared it a Total Loss. He also asked if he can get his Mags back worth 100K.
Reasons for declaring a Total Loss: 1. The car is no longer usable and repairable. 2. The total damage reaches 50% of the sum insured.
Mr. Insurance customer said that Fortune Insurance offered to pay him P800,000.
The question is why did Fortune Insurance offered him 800,000 and not the sum insured of 1,500,000?
IE: We saw a lot of loop holes in this transaction. 1. The Fair Market Value of 1,500,000. Yes, the value is correct. Because coming from its brand new price, insurance practice is to just depreciate 10-15% from its original price, thus arriving at that amount approximately from the 6years old Volvo S60. Mostly,if the car is mortgaged.
Unfortunately, the actual value of 2004 Volvo S60 in the metropolis is just around 800,000, meaning Fortune Insurance can buy you a same model, working properly at that price.
Argument: Why did FI accepted the premium payable at the coverage of 1.5M and did not inform Mr. Customer that he can just insure it at 800K?
Again, the 1,5M coverage is correct mostly if the car is mortgaged. If the car is not mortgaged, you may opt to insure your VOLVO S60 at 800K but there is a dilemma, the price of repair and parts of a Volvo is expensive, so if ever you encountered an accident even just a minor one and your cost of repair reaches 400K (easily), the insurance will declare it a total loss.
We are also not informed if the car is mortgaged, we don’t know if 800k offer is after the insurance company paid the mortgaging bank.
2. The insurance customer changed his mags without telling his insurance company. The insurance company should know any alterations in your car because by default, they will just refer to its original accessories. Now, if you want to know if you can get your mags back? i think its possible, you just have to replace it with the original mags if you still have it.
3. The Fair Market Value and the actual value is somehow accurate for the common brands like Toyotas, Nissans, Hondas and so on and has a big discrepancy on big brands such as BMWs, Porsches, Volvos, Audis, Lexus’ and Mercedes Benzes.
Mr. Insurance customer should not be worried with the offer. I believe that the problem belies on the economic status of the Country, very deep. Because if we have a bigger buying market for the Volvos then the FMV and the actual value wont be that big.
Disclaimer: The story is based from an inquiry by a stranger who seeks a 2nd opinion. The results of the decision should not be based on our opinion. We are also not affiliated with Fortune Insurance. We are just giving thoughts and opinions based on our understanding, learnings and experiences.
Online Insurance Hub hacked!
Dear Valued Customers and Followers,
Our apologies, being the first means a lot to everyone. And negative people will really try to pull you down. www.insuranceexperts.com.ph is hacked. We still don’t know who but we will soon find out. Please be patient with us. Thank you!
