Ethics in Insurance Selling in India - A Conceptual Approach

Abstract

The importance of Ethics in a Business can never be exaggerated as it works as a lubricant in the organisational machinery ensuring smooth and long uninterrupted running. The importance of Ethics escalates in Financial Industry, including Insurance, due to its very nature of business, featured with products having complexity, intangibility, deferred maturity and information asymmetry. This calls for the need to have a conceptual understanding in detail of the insurance selling by the agents. This paper investigates the different aspects of ethics in insurance selling in India, with a specific focus on the sale of insurance by agents, as they are the main constituents out of different channels though which insurance selling in India takes place and it is majorly on their shoulder to hold on activities and showcasing pre-sell & post-sell behaviour that will ultimately leave an impression of ethical treatment to the customers by the Insurer organisation represented by the concerned Insurance agents. The paper is conceptually designed to cover all aspects of ethics related to selling of insurance products by agents. It was found that the inherent nature of an insurance product is such that sometimes the concept unethical sales get established replacing an otherwise ethical sale. This happens because the goodness of an insurance product may be influenced by factors beyond the control of the agent or the insurer itself. The long-term nature of the product calls for the risk element due to changes in the political, economic and societal changes.

Keywords: Ethics, Insurance Sale, Insurance Agent, Intangibility, Long-Run

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