The chairman of the US-Asean Business Council has warned his peers about a worrisome trend in the insurance industry.
Evan Greenberg, who concurrently heads the world’s largest property and casualty insurance company, wrote a public letter criticizing insurance brokers for their “abusive behavior” and their propensity to “enrich themselves at the expense of both their customers and underwriters.”
“Cloaked in the mantra of ‘customer best interest’ or ‘treating customers fairly,’ these brokers seek the cheapest price and broadest coverage, at commission terms that by any measure are excessive,” Greenberg wrote before the delegates and participating business leaders of the Association of Southeast Asian Nations Summit arrived in Manila last week.
“Forcing underwriters to succumb to the lowest common denominator is hardly in the customer’s, or industry’s, best interest,” he said.
Greenberg said these so-called predatory behaviors had shown up around the world, including Southeast Asia, and were simply unsustainable from an underwriting perspective.
He cautioned this might lead to customer and regulatory backlash, and usher in a movement toward disintermediation.
Greenberg’s observations are significant in light of the Asean Summit’s objectives, which focus on accelerated economic integration and reforms among member-nations.
Insurance plays a key role in supporting economic growth, including improved resilience, mitigating country risk, and helping economies recover after catastrophes.
Notably, a number of Asean countries are susceptible to natural disasters, and insurance can make a big difference in terms of financial restoration.