SINGAPORE - Commissions that insurance agents receive from their customers' premiums will be delayed when customers choose to defer payment as part of the industry's relief measures during the Covid-19 outbreak.
A Prudential circular sent to agents on March 31, when the Monetary Authority of Singapore announced that insurance policyholders can choose to defer premium payments, among other measures, noted that agents' commissions will be paid out only when premiums are received as per industry practice.
The circular noted: "If your customers make use of the 6-month grace period, you will not receive commissions on the policy during that time."
"Commissions will be given to you once your customers resume premium payments," the circular stated, adding that customers will need to pay their outstanding premiums in full before the six-month extension period is over, to prevent a lapse on the policy.
Responding to media queries about how the insurer is helping agents, Prudential Singapore chief distribution officer Odd Haavik said that its financial consultants are equipped with video conferencing technology so they can continue to advise their customers and ensure those who need coverage have access to insurance.
Within a week, more than 70 per cent of its agency force have undergone the necessary training to conduct remote sales via video conferencing, and more will be trained in due course, he added.
Prudential is absorbing the costs of all the cancelled customer seminars as a result of social distancing measures, he said.
"We are also ramping up digital marketing and social media trainings for our financial consultants so they have a new way of reaching out to customers."
He added that the six-month grace period to pay premiums due is meant to help customers who are financially impacted by Covid-19 stay protected.
A check showed that agents from other insurers will also have their commissions delayed. Insurers have also stepped up ways to help their agents reach out to customers during the Covid-19 outbreak.
An Aviva spokesman said: "We are helping to ensure advisers can continue to provide their services to customers, by equipping them with the ability to provide financial advice via video conferencing or telephone. If a client is keen to apply for a policy, an e-sign facility is available too."
An Etiqa spokesman said that the impact of the industry measures has not yet been fully realised since it was announced only recently.
The number of deferred premium applications is not significant at this point, he added.
"We will be monitoring the feedback from our intermediaries and agents closely and stand ready to review our schemes and offer help to affected agents if necessary."