Author
Bowtie Team
Updated on
2025-07-10
Disclaimer: This article is translated with the assistance of AI.
With 14 years in the insurance industry, I’m often asked what real value insurance agents bring to clients. Given the hefty commissions, especially in the first year of a policy, this question is crucial. So, what exactly do clients get in return for their premiums?
Comprehensive Pre-Sale Services in Hong Kong
A top-notch insurance agent should offer a range of services even before you sign on the dotted line:
- Financial health check and review of all existing policies, including group medical insurance
- Patiently understanding the client’s financial goals and budget
- Providing tailored insurance advice based on client needs
This kind of service stands in stark contrast to agents who focus solely on pushing products without considering your thoughts or needs.
Underwriting, Application, and Claims Support
A reliable agent doesn’t just help with your medical history during underwriting; they also streamline the tedious process for large policies and review the effective dates of old policies to potentially lower premiums.
Moreover, a high-quality agent should significantly simplify the claims process:
- Arrange for doctors, hospitals, and cashless discharge
- Prepare and correctly fill out claim forms (including group medical insurance)
- Provide a hospital admission checklist
- Visit clients in the hospital to offer support
- Collect documents post-discharge and arrange for direct deposit or cheque payment
The Reality of High Upfront Commissions
While agents often earn hefty upfront commissions (up to 60% of the first-year premium), it’s worth noting that follow-up service commissions are much lower. Some agents might throw in perks like calendars, red packets, concert tickets, or free event passes—but are these really the core value of an agent?
Great Agents Are the Exception, Not the Norm
The insurance industry has a sky-high turnover rate, with possibly less than 20% of agents surviving beyond 10 years. Among the survivors, truly exceptional agents aren’t necessarily the majority. Many adopt a “hit-and-run” approach, moving on to new targets after exhausting a client’s purchasing potential.
Even the best agents have their limits:
- They can effectively manage only a few dozen to about a hundred clients
- Service quality may decline as their client base grows
- Successful agents might reduce their workload, passing some clients to junior colleagues
Challenges of Orphan Policies
As customers’ purchasing power weakens, finding a reliable agent becomes increasingly difficult, leading to the rise of “orphan policies.” While some companies may help find a new agent, success isn’t guaranteed—especially if you’re a customer with limited buying power.
The Rise of Online Insurance
Traditional insurance companies allocate a large chunk of their operating costs to agent commissions. Online insurance providers, free from this expense, can invest more in other areas like customer service and technology.
Moreover, online insurers offer greater transparency. Product brochures, terms and conditions, and premium tables are easily accessible. Some even provide direct access to claims departments, allowing customers to ask questions and check claim statuses without a middleman.
Conclusion
Whether you’ve got a stellar agent, an underperforming one, or have become the holder of an “orphan” policy, the key is not to lose faith in insurance itself. Insurance offers an irreplaceable risk-transfer function, and today, you can buy policies and file claims without an intermediary—way easier than it was a decade or two ago.
As the insurance industry evolves, it’s becoming more crucial for consumers to understand where their premiums are going and whether they’re getting the value they deserve.
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