I always being asked by marketers with regard to pricing of takaful products whether family or general. In other words, should we be part of price war competition with others? I disagree to use pricing as sole marketing strategy. Takaful is a service industry thus price is only one of the factor for consideration. Marketers should evaluate all relevant factors prudently prior to any conclusion:
1. Pricing, of course;
2. Coverage;
3. Exclusion;
4. Underwriting flexibility; and
5. Claims TAT.
For instance, those 'cheaper' policy may contain more exclusions. More exclusions means lesser coverage and vice versa.
Underwriting can be tedious for some companies where numerous requirements need to be adhered. This may lead to lesser standard policies and more loadings imposed.
As for claims, policyholders must ensure that the company adhere to prompt and justice in claims processing. As marketer, you should conduct simple investigation on the claims TAT of competitors.
Conclusion: Cheaper should not necessary be the choice for customers.
