VR Logo

Would You Buy Insurance from a Nigerian Email?

Insurance companies’ bosses should emulate the tactics of Nigerian email scamsters

It all started with my buying a term insurance policy and ended with an insight into the inefficiency of insurance salesmen’s tactics and why their CEOs should be emulating the tactics of Nigerian email scamsters. Some months ago, I bought a term insurance policy. Obviously, I bought only a term policy because that’s the only kind of life insurance product anyone should buy. I chose the insurance company because it’s one of the larger ones and also because its parent bank has a reputation for good customer service. So I thought that perhaps some of that DNA would have been inherited by the insurance business.

But no such luck. Mere weeks after the policy commenced I started receiving an increasing number of sales calls from the company’s salesmen exhorting me to buy non-term products—which actually earns insurance companies their bread and butter, such as it is. Of course I wasn’t the least bit interested, but when I would tell this to one salesman this information would not be captured or relayed to other salesmen.

As this went on, I grew increasingly short-tempered with the callers but this had no effect at all--they were all obviously hardened and experienced soldiers of this battle. By the way, did you know that the whole do-not-call system is utterly useless against preventing calls from companies from whom you have already bought any product or service? Anyhow, I decided that since there was no way to stop these people wasting my time, I should switch to wasting as much of their time, as efficiently as possible.

From that point onwards, I switched to expressing serious interest in the products the callers were peddling. I would tell them that I would buy the product and give them an appointment to come to my office at a particular time in the future. For a couple of weeks, I kept doing this and gave the whole lot an appointment for the same time and date—one on which I would happen to be travelling. On the appointed day, the whole lot turned up at my office reception and apparently had a quarrel, accusing each other of poaching potential customers. It was a most satisfactory conclusion to the whole business.

You see, sales tactics of this kind are like email spam. They are effective because the time-wastage (and cost) is asymmetrical in the favour of salesmen. Spammers can send out billions of spam messages at very low per-message cost. Even if the response rate is tiny, the whole business is still viable. It’s often been suggested that if everyone who received a spam message started clicking on the link, spam would disappear overnight because just the server cost and the follow-up of handling billions of fake clicks would make it uneconomical to send out spam.

What I did was the physical world equivalent of clicking on every link. If a large enough number of people did this, the sellers would stop spam calls and be forced to somehow more accurately pre-select those who are more likely to want their product.

As a matter of fact, bosses at insurance companies should google for a paper from Microsoft Research called 'Why do Nigerian Scammers Say They are from Nigeria?' It seems that it must actually be beneficial for email scammers to claim that they are from Nigeria even if they actually aren't. More generally, it makes sense for a scammer to make a ridiculous and unbelievable claim. That way, only the gullible respond and the scammers' success rate from the responders is higher, even if their overall success rate from the total spam list is lower. If they sent a more believable initial email then some intelligent people would also respond. This would increase the scammers' wasted effort.