For a few days last week, local unit trust platform Fundsupermart (FMS) started to offer insurance products on their platform. They even introduced their entry into the insurance market with a bang by offering to rebate 50% of the commissions on their products to their clients.
The offer seems too good to be true and would have worried all other distributors of insurance products such as insurance agents, financial adviser representatives and the bancassurance channels.
Unfortunately, in case you were thinking of taking up their offer, it is too late do so now.
For some unknown reason or reasons, Fundsupermart have already stopped their promotion. In fact, even the insurance tab is no longer on the website. It seems that they might be reconsidering their strategy of selling insurance.
For now, insurance distributors can breath a sign of relief against this new competitor and strategy. However, the relief might be short-lived as somebody else can easily come up with the same commission rebate strategy. Even if nobody does, the FAIR review has directed insurance companies to setup direct purchase channels with zero or low commission.
All this can only mean one thing, commissions spiraling downwards and better deals for consumers. And tougher life ahead for insurance distributors.