Liga Asuransi – Dear reader, how are you? Hopefully, your business will run smoothly and achieve the best results this year.
Continuing our previous writing, this time we will be discussing the importance of using the best insurance company.
This article is inspired by the reality that exists today many insurance companies in Indonesia and in the international market are experiencing financial difficulties. One of the causes is the result of COVID-19 crisis that occurred almost 3 years ago.
Therefore, we need to be careful in choosing an insurance company, if it is a wrong decision it can lead to your accident which should be claimable becoming unpaid, or even if paid not as expected.
If you are interested in this article, please share it with your colleagues immediately so that they also understand like you.
As you might be aware that buying insurance is a big decision, which is why choosing the right insurer is important. So how do you know whether an insurance company is good or not? Our article will help you identify the qualities of a good insurance company. You will find it easier to decide which one to pick.
Mostly, purchasing insurance can be overwhelming. Definitions, conditions, coverages, exclusions, and endorsements can cause confusion and possibly give you a headache.
Imagine losing everything you own to a fire and not having insurance to help get your life back on track.
When ask people who their insurance company is, they usually answer, “I don’t know,” or they give me their broker’s name.
For your consideration, if there’s a loss to your home, auto, or business, the last thing you want to have to do is figure out who’s your insurance company and who’s your broker and how they help when your life’s been turned upside down.
Below are the 10 important things you need to know:
- Licensing
For your information, not every insurance company agent and broker are licensed to operate in Indonesia. As a rule, you should only buy from a company licensed by the Financial Authorities of Indonesia (OJK), because then can you rely on OJK to help you if there’s a problem. To find out which companies are licensed in your state, contact the state insurance department.
- Credibility
Credibility is one of the key qualities of a good insurance company. A good insurer is committed to its customers and stays true to its mission.
Does the insurer have a good reputation in the industry? Does the insurer have a good claim record? Do their partners/brokers and customers trust and stay loyal to them? Do they deliver their promise? How long have they been established? These are some questions you need to investigate.
- Financial condition
The fundamental reason for purchasing insurance is to obtain peace of mind. You want to be sure that should the unfortunate situation arise, your insurer will be there to cover you all the way so that you can concentrate on regaining assets. Therefore, looking into the financial condition of the insurer is extremely important.
Check – do they pay out claims promptly and as promised? Do they have a solid claim record? Who are the underwriters?
- Company history/reputation.
Research the insurance companies you’re interested in. By visiting their websites, you may learn:
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- How long they’ve been in business?
- In which states they sell their products.
- Their mission, vision, and values.
- Company leadership.
- Community involvement.
- Types of products they sell; and
- Financial strength.
It’s unlikely you’ll find a company with only positive reviews. If the information doesn’t answer all your questions or leaves you feeling not quite right about them, research another company. As with other purchasing decisions, you should be comfortable with your decision.
- Understand the insurance company’s financial strength.
If there’s a difficult claim situation, you don’t want to hear your insurance company can’t pay your claim because of its poor financial results. Many insurance companies work with independent rating agencies that review many factors and the financial results to assign a letter grade or score.
You buy insurance to protect you financially and provide peace of mind. Select a company that is likely to be financially sound for many years, by using ratings from independent rating agencies.
- Coverage/Product Quality
Select an insurance company that provides appropriate coverage for your personal or business needs.
Leading insurers constantly maintain relevance to expatriates, ensuring that their products are competitive. They evolve their products to suit the lifestyle changes of their customers. Ask yourself this – do they provide flexible options such that customers can pick and choose what they need? Can they pay for just that, in terms of level and area of coverage? What is covered in the policy? How much is covered in the policy? Does the policy ensure that customers’ needs are met? Does it provide automatic renewal?
- Price/premium rate
Many companies sell insurance policies and prices vary greatly from one to another, so it really pays to shop around. For certain types of insurance, OJK may publish a guide that shows what insurers charge for different policies in various parts of your state.
While price should be a consideration when purchasing insurance, it shouldn’t be the only one. Remember the old saying, “You get what you pay for.” There are many reasons why pricing differs between insurance carriers.
A lower price may mean you have less coverage. Less coverage means more money out of your pocket when a loss occurs. A lower price may also mean that the insurance carrier has entered a new market for them so it may not have the experience another insurer would.
A good insurer will always ensure that you get good value for money. Find out whether the insurance company has a different price structure across each specific target audience.
- Ease of doing business (Service)
You should feel comfortable with your insurance purchase, whether you buy it from a local broker, directly from the company over the phone, or over the Internet. Make sure that the broker or company will be easy to reach if you have a question or need to file a claim.
Your insurance company and its representatives should answer your questions and handle your claims fairly, efficiently, and quickly. You can get a feel for whether this is the case by talking to other customers who have used a particular company or broker.
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- Understand how you can interact with an insurance company. Interactions may include:
- Online bill pays.
- Online claim reporting.
- 24/7 customer service.
- Social media platforms.
- Policy changes; and
- Billing questions
- Clarity
Researching and selecting which insurance is most suitable for you and your assets is an extremely demanding process. Thus, it is important that insurers are as clear as possible in their communication.
This includes explaining the benefits clearly, using standard terminologies and definitions, and keeping members informed of the rationale behind premium inflation. Also, ensuring information required by consumers to evaluate products is presented clearly in a common format to facilitate easy comparison, having a clear claim procedure, etc.
- Credit Rating
An insurance company credit rating is the opinion of an independent agency regarding the company’s financial strength and ability to pay policyholders’ claims. It doesn’t indicate how well the insurance company’s securities are performing for investors. In addition, an insurance company’s credit rating is considered an opinion, not a fact, and ratings of the same insurance company can differ among rating agencies.
There are four major insurance company rating agencies: Moody’s, A.M. Best, Fitch, and Standard & Poor’s (all but A.M. Best also provide corporate credit ratings for investors). Each agency has its own rating scale that doesn’t necessarily equate to another company’s rating scale, even when the ratings appear similar.
Benefits of Insurance Company Credit Ratings
Insurance company credit ratings are important because many people and businesses depend on insurance companies to pay claims when they suffer an insured loss. Insured risks are usually those that would cause a large financial loss if not insured. However, insurance companies can only pay if they have the money. Like other businesses, insurance companies can become insolvent.
What is the best way to arrange insurance?
As you can read from the description above that there are at least 10 things you need to know in choosing an insurance company.
If you make the wrong choice, then the accident you may suffer should have been reimbursed by insurance and it will not pay because the insurance company cannot afford to pay.
The best way to get the best insurance coverage is to always use the services of an insurance brokerage company.
Insurance brokers are always updated with the development of the insurance industry. Keep following every change in the conditions of all existing insurance companies. The insurance broker will only choose the best insurance company that meets almost all the criteria stated above.
One of the insurance brokerage companies in Indonesia that have experience is L&G Insurance Broker.
For all your insurance needs, contact L&G today!
Sources:
- https://www.investopedia.com/terms/i/insurance-company-credit-rating.asp
- https://www.iii.org/article/choosing-an-insurance-company
- https://expatmedicare.com/qualities-of-a-good-insurance-company/
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L&G HOTLINE 24 HOURS: 0811-8507-773 (CALL – WHATSAPP – SMS)
website: lngrisk.co.id
E-mail: customer.support@lngrisk.co.id
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