Insurance servicing: what it means, and how an agency runs it

What servicing means in insurance

In everyday use, servicing means keeping something in working order, the way a car goes in for a service. In insurance it means the same thing for a policy: keeping it correct, paid up and ready to claim on, for as long as it runs.

The sale happens once. Servicing runs for as long as the policy does, which for life cover can be decades.

The insurer processes most requests. The client usually doesn't contact the insurer first, though. They message their advisor, often on WhatsApp, because that's the number they have. So the agency ends up as the front desk for every policy its advisors have sold, whether or not anyone planned it that way.

That's why servicing is a management question for an agency leader, and more than a habit each advisor gets right or wrong.

What counts as a servicing request

Most requests fall into eight types. The table shows each one, who should usually handle it, and what tends to go wrong.

Keep admin requests and advice requests apart. A change of address can go to anyone trained on the insurer's forms. A request to cut cover to save money needs the advisor, because the client is making a decision about their protection.

Why servicing lands on the agency leader

Servicing problems rarely come from one big failure. They come from small requests nobody owns:

• Each advisor keeps requests in their own chats, so there's no shared list of what's open, and nobody sees how long a request has waited until the client complains.
• New advisors learn the insurer's forms by getting them wrong.
• When an advisor leaves, their clients' open requests leave with them, usually without anyone noticing for a week or two.

Regulators expect this to be organised. The Monetary Authority of Singapore's Guidelines on Fair Dealing, revised in May 2024, cover after-sales service and complaints as well as the sale. They ask the board and senior management of each financial institution to put in place clear service standards for processing key service deliverables, and they give insurance claims as the example. The guidelines are addressed to the insurer or advisory firm, but the work they describe happens in your agency, so the standards your agency keeps are the ones clients see.

There's a cost to production too. Here's an illustrative example. Take an advisor with 250 policyholders. If one in ten asks for something in a month and each request takes 30 minutes of messages, forms and follow-up, that's about 12 hours a month, or a day and a half of selling time. Most of those requests are admin that a trained assistant could do.

How to set up servicing in an agency

You don't need a new department. You need one list, clear owners and a weekly look at what's stuck.

1. Put every request on one list

Every request gets logged the day it arrives, whoever receives it. The fields that matter are date in, client, policy, request type, owner, next step and the date that next step is due. A shared spreadsheet works. So does a CRM, as long as the whole team uses it. Each advisor's memory doesn't work.

2. Split admin from advice

Go through the request types above and mark each one admin or advice. Admin requests can go to a shared assistant or a trained junior. Advice requests stay with the advisor who holds the relationship. This one split usually frees the most advisor time.

3. Set a target time for each type

Agree how quickly each type should move and write it down. The times below are starting points to adjust for your agency, since no regulator sets them for you:

4. Finish on the first contact where you can

Many requests can be closed while the client is still on the call or in the chat: the right form sent and filled in, the payment link resent, the claim document list given. Each request finished on the first contact is one fewer item to chase later.

5. Tell the client when it's done

A request isn't done when the form goes to the insurer. It's done when the client hears it went through. Add "client told" as the last step on the list.

6. Look at the list every week

In the weekly team meeting, spend five minutes on servicing: how many requests are open, which one is oldest, and any premium problems not yet fixed. Premium problems go first, because a lapsed policy can leave a client without cover.

7. Plan for the day an advisor leaves

Decide before the advisor's last day who takes each client, then tell the clients by name who to contact. Move every open request to its new owner on the list.

Nominations: the request most often done wrong

Beneficiary nominations deserve their own training, because mistakes surface only when a family makes a claim. The Life Insurance Association Singapore's guide to nominations sets out the rules your advisors need to know:

• Nominations have been available under the Insurance Act 1966 since 1 September 2009, for life policies and for accident and health policies with death benefits.
• To make a nomination, the policy owner must be the life assured and at least 18 years old.
• A trust nomination can name only the policy owner's spouse or children. It uses the prescribed form, completed in front of two witnesses who are at least 21 and are not nominees or a nominee's spouse, and the guide says it must be a hard copy with original signatures. Once it's made, the owner gives up rights over the policy, and changing it needs every nominee's consent.
• A revocable nomination can be changed or cancelled at any time without the nominees' consent. The guide gives divorce and the birth of a child as reasons people change one.
• Online nominations: since 2 January 2024 insurers may offer them.
• If there's no nomination and no will, the insurer may pay up to S$150,000 to a proper claimant under section 150 of the Insurance Act. Anything above that goes to the administrator named in a grant of letters of administration.

Put a nomination check into every review and every life event a client mentions. A marriage, a divorce or a new child is a servicing request even when the client doesn't ask for one.

Complaints: what the guidelines expect

Outcome 5 of the MAS Guidelines on Fair Dealing is that financial institutions handle complaints in an independent, effective and prompt manner. The guidelines expect firms to set reasonable timeframes to acknowledge a complaint, interview the customer and complete the review. For complex complaints that need more time, they expect a written interim reply that gives the customer an indicative timeframe. They also say customers should be made aware that they can take a dispute to the Financial Industry Disputes Resolution Centre (FIDReC).

For an agency, that comes down to three habits. Log every complaint on the same list as other requests, marked as a complaint. Get the agency leader on it within a set time. And if it will take more than a few days, tell the client in writing when they'll hear back.