Insurance: aligning agent-consumer interests

[SINGAPORE] The decision made by the Monetary Authority of Singapore (MAS) not to tinker too much with the commission structure of insurance agents in a recent review shows how difficult the process of aligning the interests of consumers with agents is, said observers.

Some argue that agents can now be incentivised to look after their client's interests as a framework is being developed to audit agents' transactions for things like selling suitable products and providing sufficient information to the consumer. Agents' variable pay would be withheld if these non-sales key performance indicators were not met.

Observers said the implementation of this framework, known as balanced scorecard remuneration (BSC), should be the focus of the industry. However, it is still difficult to measure what "good advice" is.