Insurance companies need to improve cold calling sales standards

The Financial Services Authority has instructed insurance companies to improve the standards when it comes to sales made through cold calling. The UK's financial regulatory body claims that the quality of sales made through cold calling by insurance companies is poor, and that customers are being rushed into making an important decision by over-zealous staff members that are keen to make commission through increased sales.

The FSA carried out a review of insurance sales, and were satisfied by the standards and level of quality from insurance companies that were contacted by consumers about an insurance product. However, the FSA was not happy with the standard when the call was initiated by the insurance company, and cited a number of factors and areas that needed to be improved by insurers that made these unsolicited calls.

One official from the Financial Services Authority stated: 'The quality of cold calling in general insurance sales was disappointing - consumers were pressurised and the benefits of the product were sometimes exaggerated. We expect to see significant improvements when consumers are cold called.' He also said: 'Swift action has been taken to deliver those improvements at the firms we visited and we are following up with other firms which use cold calling as part of their sales strategy. The bottom line is that firms must never pressurise consumers into making a rushed decision and must always clearly spell out the nature and limitations of the products.'

The problems associated with the quality of calls from cold calling insurance companies included rushing consumers into making a decision, making the benefits of the cover sounds more appealing and useful than they actually were, and not providing relevant information with regards to policies, which increased the risk of leaving the consumers with a policy that would not really benefit them.