Insurance education

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Insurance education of the public an
intermediary perspective 13 April
2007 Istanbul
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Contents

• I. Introduction
• II. Insurance education and the regulatory
  framework
• III. WFIIs views on financial education
  initiatives
• IV. Examples

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I. Introduction

• The importance of insurance is unquestioned in
  modern economies.
• Insurance serves a broad public interest and is
  vital to individuals.
• Insurance intermediaries play an important role
  in the insurance process
• They serve as the link between insurance
  companies seeking to place insurance policies and
  consumers seeking to procure insurance coverage.
  (globalisation)
• Intermediaries, traditionally called brokers or
  agents or producers, offer advice,
  information and other services in connection with
  the solicitation, negotiation and sale of
  insurance.

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II. Insurance education and the regulatory
framework

• When considering measures within a jurisdiction
  concerning insurance education of the public, the
  existing regulatory framework should be taken
  into account , in order to avoid overlapping
• What does regulation impose in terms of
• a. Provision of quality information before,
  during and after the conclusion of contracts ,
• b. Legal requirements for intermediaries
  /insurance distribution practices,

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II. Insurance education and the regulatory
framework a. Provision of quality
information

• Acording to WFII Insurance Intermediaries and
  all those involved in insurance distribution
  should provide insurance buyers with sufficient
  information to make informed decisions about the
  purchase of insurance and insurance services.
• It is not only important that clients understand
  their contracts but also that they understand
  whom they are dealing with
• all persons or entities engaged in insurance
  intermediation should be able to inform their
  clients upon request whether or not they advise
  from a broad range of insurers / insurance
  products and whether or not there are contractual
  obligations to conduct business with the insurer
  of the product that is advised.
• the public should be informed of the means to
  verify that persons or entities engaging in
  insurance intermediation are registered or
  licensed.

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II. Insurance education and the regulatory
framework b. Legal requirements for
intermediaries

• According to WFII
• Regulation /Legislation on insurance
  intermediation should be activity based.
• Regulations should focus on ensuring that all
  those who are undertaking the activity of
  insurance intermediation meet reasonable
  professional requirements as the primary means of
  protecting consumers and clients.

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• Once the regulatory framework is analyzed, one
  can start thinking about the design of insurance
  education programs.
• Insurance / financial education initiatives
  should not result in extra regulation or
  obligations for the operators in the sector but
  in a better understanding of the regulation and
  the insurance products and sector in general by
  the private consumer.

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III. WFIIs views on financial (insurance)
education

• Insurance and risk education should start at
  school
• The role and functioning of the various players
  in the market should also be explained in this
  kind of programs.

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III. WFIIs views on financial (insurance)
education

• Insurance education initiatives by governments
  should focus on objective information allowing
  the public to make better choices. They should be
  neutral from a competition perspective and be
  limited to facts.
• Although neutral, campaigns should have a
  positive approach compensating (or
  counterbalancing) the negative context insurance
  is mostly connected with in the perception of the
  consumer.

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III. WFIIs views on financial (insurance)
education

• Government actions in terms of insurance
  education should by priority focus on creating
  awareness about risk and insurance needs.
• Insurance education should also focus on the
  importance of the quality in the choice of
  insurance coverage.

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III. WFIIs views on financial (insurance)
education

• Governments could also do an effort
  explaining the regulatory framework and the
  supervisory activities in the insurance sector.

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III. WFIIs views on financial (insurance)
education

• Concerning good practice in education of the
  public
• Market structures and systems are still very
  different (even in a globalized world).
• These differences make that practices or
  solutions in one market cannot simply be copied
  into other markets.
• National initiatives in this field should, in any
  case, be developed in close cooperation with the
  national associations in the sector and should
  not result in extra regulation.

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III. WFIIs views on financial (insurance)
education

• The existing literature on financial
  education differentiates between the notions of
  educating, informing, advertising, selling and
  advising.
• Distinctions should be considered between
  life and Non-life

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IV. Examples of insurance education initiatives

• As a complement to the disclosure of information,
  insurance intermediaries and their associations
  around the world are carrying out initiatives and
  projects to increase the knowledge of individuals
  on insurance issues.
• (In each example only parts of the whole project
  are mentioned).

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IV. Examples of insurance education initiatives
UK/BIBA
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IV. Examples of insurance education initiatives
UK/BIBA

• BIBA has a consumer section in its webpage with
  the following sub-sections
• Consumer notes. They cover a variety of topics.
  For example TRAVEL INSURANCE - WINTER SPORTS
  CHECKLIST
• Choosing an insurance policy.  Jargon Buster   
• Consumer helpline.

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IV. Examples of insurance education initiatives
IBAC/Canada-Ontario
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IV. Examples of insurance education initiatives
IBAC/Canada-Ontario

• Four good reasons to insure.
• Three main types of insurance.
• Two key players your insurer and your broker.

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IV. Examples of insurance education initiatives
IIABA/US
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IV. Examples of insurance education initiatives
IIABA/US

• Quick read brochures
• Such as
• Filing your auto insurance claim
• Filing your home insurance claim
• Surveys about risks
• Etc

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IV. Examples of insurance education initiatives
NIBA/Australia
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IV. Examples of insurance education initiatives
NIBA/Australia

• Types of Consumer Insurance
• Your home and contents
• Your Car
• Terms such as
• Excess or Deductible, No Claim Bonus,

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IV. Examples of insurance education initiatives
IBA/Ireland
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IV. Examples of insurance education initiatives
IBA/Ireland

• What are the Principles of Insurance?
• Utmost Good Faith, Indemnity, Subrogation,
  Contribution, Insurable interest, Proximate cause
• Frequently Asked Questions
• What questions should I ask my broker/
  Intermediary
• Registered ? PI Cover, Financial guarantee,
  links with insurers?

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• Insurance and risk education is important
• Should start at school
• Should not create extra layer of regulation but
  should explain the regulation and be complement
  to regulation
• Adapted to national market circumstances
• Intermediaries play their role (and will continue
  to do so)

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