ASIC has called for home and contents insurance sales staff to receive tailored, ongoing training after its review found that some insurers delivered limited training with courses that focused on sales techniques and lacked detail on insurance.
In one case, the regulator found that an unnamed insurer provided only brief product training and included minimal reference to the product disclosure statement (PDS). The same insurer had a stronger focus on making sales and guided staff to the insurer’s ‘help system’ in order to teach themselves on the job.
The regulator’s report entitled “
Review of the sale of home insurance” analyses data from 12 insurers, representing 30 home insurance brand, over six months last year and aims to understand the information that consumers are receiving about home insurance at the point of sale and to encourage insurers to adopt practices that reduce the risk of consumers buying insurance that does not meet their needs.
The report found that while all insurers had guidelines and procedures for training and monitoring staff, some training programs were limited to new staff inductions and did not provide ongoing training; training was standardised across all home insurance brands although the products differed; and programs varied in length – with some being a few days, and other a few weeks. Some programs even lacked detail around insurance and the PDS.
ASIC pointed to one anonymous insurer who issued the same generic training guides to multiple home insurance brands, providing general guidance as to what needed to be covered in the training, “but left it to the facilitator to ‘fill in the blanks’ and tailor the training to the specific brand” even though the home insurance brands were not offering similar insurance.
Some insurers provided staff with training and development modules on the risks of underinsurance, the benefits of calculators and training on specific insurance feature’s but telephone sales staff failed to incorporate this on calls – even when asked by the consumer.
ASIC suggested that training and development could be provided to sales staff on an ongoing basis and updated regularly to incorporate important compliance and/or product changes.
It noted that training could be more tailored to individual insurance products and features, warned against shorter training programs that “may be rushing through the content of training too quickly”, and urged for training and development content to be better incorporated into telephone sales scripts and evidenced in telephone sales calls.
ASIC found that most insurers failed to set out what measures or steps should be taken if a breach or issue identified. It called for clearer ‘next steps’ once a breach has been identified and reported.
Overall, ASIC said, methods of training were “appropriate and a variety of delivery methods were used to encourage staff engagement and promote practical learning”.
Lack of insurance knowledge
ASIC also released a separate report that detailed consumer interaction with insurance companies and gave information about their experiences using a sample of 400 random phone consultations alongside online content to draw conclusions.
The report details an overall lack of insurance knowledge that permeates through Australia.
“In general, consumers knew very little about the details of their home insurance policy,” the report said.
“The current disclosure system operates on the presumption that consumers with little or no knowledge will recognise the need to adopt a search and information gathering strategy, during which they compare detailed PDSs. The research has shown that this is a false assumption.”
“Consumers used the phone ‘to talk to a human’ because they wanted to consult, clarify or verify. In some cases, the consumer was able to do this by asking the call centre operator questions about the policy.
“Some insurers did what consumers called ‘tailoring’, which was to ask a great many questions of the consumer, in one case asking them to obtain a tape measure to measure the length of the house.
In another, the staff member looked at the property on the Google Maps website during the call, and emphasised to the consumer the proximity of trees to the property.
Several consumers said that they found this process too lengthy, but also useful in that it made them think about their risk.”
