In this fourth article in the “Advisers’ Voice” series, Dr Rebecca Sheils, co-founder of the Beddoes Institute, takes a deep dive into innovation ideas for life companies in the area of business support as suggested by advisers in a Beddoes Institute study that concluded in February 2016. From the study it appears that advisers are very aware of the problem of underinsurance and would like support from life insurance companies in tackling the issue as they also strive to build sustainable businesses.
In this fourth article in the “Advisers’ Voice” series, Dr Rebecca Sheils, co-founder of the Beddoes Institute and the Most Trusted Advisers Network, takes a deeper look at the calls that advisers are making of life companies in the Beddoes Institute’s Adviser Experience Benchmarking Study.
In the first article in this series, the suggestions made by advisers in response to the question; “What is the most important type of product or service innovation you would like to see from Life Insurance Companies to help you with your business?” were grouped into five cohesive and actionable themes based on how often they were mentioned. This has created an evolving and unfolding ‘Innovation Agenda’ for Life Insurance Companies through this “Advisers’ Voice” article series.
Innovation in relation to business support tools and services was the third most important theme with 35% of advisers calling for innovation in this area. This was only marginally behind underwriting innovation on 37% mentions.
So what do advisers want with regard to business support tools and services in the future?
Figure 1 below shows the relative importance of the areas of innovation mentioned by advisers and Table 1 contains a random selection of unedited adviser comments and suggestions which illustrate the specifics of what advisers want from life companies in each of these areas.
Most of the suggestions relate to:
- Consumer campaigns aimed at improving the perceived value of personal insurance;
- Providing tools to more effectively convey the importance of personal insurance to prospective clients and get them over the line;
- Operational tools and support to drive business efficiencies; and
- Better use of technology to help advisers and end-clients more easily and effectively manage policies.
Figure 1: Percent of advisers mentioning different innovation ideas in relation to business support tools and services*
* Based on advisers wanting business support and BDM innovation from life companies
Consumer awareness campaigns to educate and highlight the importance of insurance and bring this front and centre in the minds of consumers is considered vital. Coupled with this, many advisers want insurers to actively promote to consumers the benefits of using a financial adviser when taking out insurance (mentioned by 16% of advisers that called for business support change). Based on these suggestions, it is clear that advisers believe that such advertising would play a significant role in changing the perception that personal insurance is a choice, thereby encouraging more consumers to take out cover (refer to Table 1).
Related to this, close to one in eight advisers that called for innovation in the area of business support (13%) want insurers to provide new client engagement tools and support. Examples of this include tools that can be used with prospective clients to model client outcomes from different scenarios, online simulators that can be used to help evaluate health risks at different ages and life-stages, business insurance calculators, premium calculators to evaluate different premium structures (e.g. level vs. stepped) and transparent claims information and statistics to help improve the perception that the client has of the insurer. Such client engagement tools would enable advisers to more effectively convey the importance of personal insurance to prospective clients and get them over the line.
Operational and business management support to help advisers run more efficient and profitable businesses is equally important for 13% of advisers. This includes suggestions for life companies to have faster and more streamlined processes from the initial application to product implementation which would free up advisers’ time to provide advisory services and support to the client, integration of product provider systems and processes into adviser systems to lower costs and drive efficiency, improved online reporting capabilities, more involvement in the claims process and improve their communication with the end-client.
Improved policy and client management tools also featured strongly with 12% mentions. Specifically, advisers want life companies to leverage technology (e.g. apps, customer portals etc.) to enable both advisers and clients to more easily and effectively manage policies. They also want greater use of digital technology, better communication relating to premium increases and easier processes for making adjustments to policies. Interestingly, we know from the Beddoes Institute’s Policyholder Perceptions Study that a very large number of end-customers also want this from their insurer.
The key message is that advisers want life companies to take more decisive action with consumers to enhance the value of insurance and advice and encourage more consumers to take out cover
Many advisers also want to have greater access, contact and support from BDMs (11% mentions) and more education and training from life companies (10% mentions). Education and training topics of interest include webinars covering industry change, assistance with how best to charge an advice fee, and greater definition and discussion around churn.
Some advisers also want simple and effective marketing material that will help them with business development (7% mentions), stronger adviser (customer) focus (7% mentions), better client retention tools and support (3%) and more competent and qualified BDMs (2%).
The key message is that advisers want life companies to take more decisive action with consumers to enhance the value of insurance and advice and encourage more consumers to take out cover. They also want tools and support to help them achieve this with their own prospects and clients to improve client conversion and ongoing client engagement, and to support them in running more efficient, profitable and sustainable businesses.
Table 1: A random selection of unedited adviser comments and suggestions which illustrate what advisers are calling for from life companies with regard to business support and BDMs.
CONSUMER AWARENESS CAMPAIGNS, EDUCATION AND COMMUNICATION – 16% mentions
Advertising on how the new FSR act is going to benefit the consumer.
As a nation, we are underinsured and therefore have a responsibility to communicate and educate the public of the importance in having insurance in place. So as a service innovation, I would like to see more accessible social media marketing material which will start to assist us in achieving this.
Change the perception that life insurance is a choice. It should be thought of in the same way that car, home and contents insurance is, a necessity. I don’t think it should be compulsory, but I do think we can do more to make it easier to obtain insurance and to provide incentives for those who do the right thing to look after their health.
Companies need to stand in the clients shoes in the current environment and understand what they need to do to increase trust about the benefit of insurance. They also need to promote the social benefit of insurance and how much is paid out each year.
I would prefer life companies to sell the benefits of risk protection in Regional Australia. They currently run reasonable campaigns in the Capitals and I realise the “best bang for buck” mentality of that, but it makes our job in Regional Australia very hard.
Life companies need to develop education programs and story to show the public of the benefit of life and all the risk products that will protect the Australia lifestyle, start thinking about people without insurance and educate the uninsured people of the benefit of protecting the Australian Lifestyle, and save the tax payer the cost support benefits after injury.
Market directly to the public. Explain the need for insurance, and why it is crucial to be looked at. That will benefit my practise.
Need much better advertising – suggest all insurance companies jointly fund an education/advertising campaign similar to industry super funds advertising.
Stream line education for clients with national advertising to show why you should have an adviser to help plan you tomorrow.
Targeted advertising utilising social media that brings the importance of insurance to the front of the minds of consumers in certain periods of life change. For example, if a person is looking at a lot of baby/young child websites – they would see an ad from an insurer reminding them to protect their families by insuring themselves, and to contact a financial adviser for more information.
NEW CLIENT ENGAGEMENT TOOLS & SUPPORT – 13% mentions
A preliminary service/presentation tool that can be used to model client outcomes/impact on different types of claims at the point of the initial advice. A flexible presentation style tool so the application process comes after “real” engagement from the client.
A simple tool that allows me to show clients what it will cost and the process for having two policies. One inside super one outside super and how I can move the sum insured from the Super policy to the non-super policy as required.
A tool that the client can work through on a website including their family history to see their likelihood of something happening to them. That would help bring forward the ‘realness’ of their situation including age, sex, lifestyle variables. in addition to this the program could model the impact that would have on their life, i.e. being unable to work and on their mortgage they would default on payments, etc. this way it is not someone telling them or using emotional triggers, rather, the client is educating themselves of the adverse impacts of not having the right amount of cover in place and would feel empowered rather than sold.
Business insurance calculators for Key man & buy sell insurance. One that would provide prompts for key figures/inputs and recognise CGT implications and ownership considerations.
Gap analysis tool that displays in a client friendly way the shortfall and value of insurance in protecting their lifestyle.
A 1 page flyer containing graphs about claim statistics to help better explain to clients about the essential of personal insurances.
Better premium calculator to indicate the benefits of hybrid premium structure (split between stepped and level)for short term and long term insurance needs.
I would like to see an insurance wrap! One where I can go onto one system – get the quotes compared against each other, put in say conditions people might have and then it narrows it down to the insurers I should speak with. The comparisons at the moment through Xplan and similar systems, I believe are of little value. There is a lot of missing information when that A rating comes up. One is not always comparing apples with apples.
OPERATIONAL AND BUSINESS MANAGEMENT TOOLS & SUPPORT – 13% mentions
A streamlined way of doing business from application process to product implementation. Too many forms and none that are currently integrated with a client management system.
Provide better support for administration (Application to claims) to enable our business to provide advisory services to our clients. Quicker application process with less tracking required from our office.
The biggest issue is the time it takes to recommend and implement insurance advice. Anyway they can speed this up would be great.
We have grown our practice revenue to $600,000 over the last 7 years and need assistance to go to the next level where our revenue income to be greater than $1M.
More involvement in the claims process with advisers and better communication to the client.
Integrating product provider systems and processes into adviser systems and processes to ensure lower cost of fulfilment overall.
POLICY & CLIENT MANAGEMENT TOOLS – 12% mentions
Digital renewal notices that allow clients to access an app where the client can action different scenarios – increasing or decreasing their own sums insured – and illustrate the effect on their premium. Our offices are currently requesting quotes for clients at renewal time and it is very time consuming and inefficient.
Email PDF renewal letters to advisers. Currently most mail or you have to check each insurer site to collect renewal info.
I find that the Life Insurance Industry puts too much focus on the new business part of the transaction and on the claims management part of the transaction and has little regard for the ongoing management of the policy and making it easy to review and make minor adjustments. If you are giving “advice” properly at the set up, you must continue to adjust the policy each year based on this advice and at present this is too hard and makes selling insurance unattractive for the ongoing we will receive in future.
More and better communication from the life company to the client around anniversary date regarding the value of cover and, if a premium rise is about to happen, a compassionate and authentic explanation of why. Insurance companies who hold premium rises to an absolute minimum will help me with my business best as lapses and cancellations due to premium increases is my biggest bugbear.
Online application for an increase to an existing policy.
An online product communication link between the manufacturer, planner and client. i.e. a CPI offer is emailed to client and planner. Client is then prompted to ask planner directly about what to consider, and planner prompted to engage client on what the CPI offer means and can provide advice. It will create greater engagement. OR A portal where a planner and client can view the same screen, and provide communications to each other that are saved as part of the product history. i.e. no beneficiary nominated, planner can put a message in the portal to the client to say ‘ you need to consider nominating a beneficiary, and consider Binding nomination. We need to discuss this. Client replies through the portal to say yes they want too, and the product manufacturer can send the client/or planner the correct forms through the portal for that specific product. Again, greater engagement and communication will means less cancellation of insurance.
Easier processes to make changes to existing covers.
GREATER ACCESS, CONTACT AND SUPPORT FROM BDMS – 11% mentions
BDM’s are not down the end of the road or 15 minutes away. A BDM has to commit to a 9 hour round trip to see me and our practice. I have been on the road to Perth three times in the last month for 2/3 hour PD events. I am committed. I would like to see that commitment reciprocated by the life companies.
Personal service from long standing BDM and associates and to be able to contact people and not be placed in queue for any type of enquire. Need to build repour in order to write business on a consistent basis. Pricing and terms are similar the service aspect wins it for me.
Supportive BDMs who take the time to visit and touch base on a regular basis.
The ability to be able to ring someone who will respond swiftly to a reasonable request. If policies need to go into force at that moment I’d like to have someone to ring to make sure that it happens.
Simply, knowing the right person to go to at the right time, in a timely manner.
EDUCATION & TRAINING – 10% mentions
Assistance with training and SoA development. Wording on how to differentiate between direct, group and retail insurance. Funding for training staff.
Help manage and understand the risk associated with insurance when clients don’t disclose. On site specific training for advisers less experienced in insurance.
Worldwide trends in life insurance industry.
We need more visible and constant contact from our insurer including training, insurance strategies, use of tools etc.
Advisers need more support from insurance companies to help understand each company’s unique product.
INDUSTRY REFORMS EDUCATION & SUPPORT – 8% mentions
Engage advisers & businesses in providing meaningful feedback to the Federal Government & regulator in relation to regulatory reform. The ability to deliver cost effective, timely advice is being hampered by self-interest groups without real consideration for the public overall.
Given the current Federal Government legislation, I would like assistance with charging an Advice Fee and how I approach my clients. Being a predominant Risk & Super Adviser I have not charged a fee for insurance advice in the past and I’m struggling with how much is my advice worth and how do I position it to my clients. It’s all very well to say charge a fee but really my clients haven’t had to pay a fee before and now for me to stay in business this is going to have to change.
Support the industry to change to the new government regulations.
Webinars to cover industry change.
With the two year responsibility period, the insurance companies need to figure out a way to understand if the policy is cancelling due to replacement or due to the client. For example, I have clients who have had to cancel their cover through no fault of my own. We have a strong relationship but because they move overseas, are going through a divorce or their age makes the premium cost prohibitive, people have cancelled their cover within 2 years. I have a very in depth service proposition so they are not leaving because they are unhappy with me, but because of personal circumstances. Due to these clients, my business will suffer through no fault of my own so insurance companies need to figure out how to separate churn/ replacement policies with situations i’ve outlined. I am not against the 2 yr responsibility period, but it concerns me.
I understand this industry requires change in education and compliance however my argument is that with all of the legislation put in place since FSRA in 2004 it has made no difference to some advisers doing the wrong thing. Not all financial planning business are in Sydney dealing with high net worth clients who can afford to pay high costs for advice. We need to be able to provide more advice to more clients at affordable rates. With all of the compliance we currently have it is making the advice more costly for the average client. We are a small business and the amount of processes we have to comply with is consuming excessive amounts of time rather than focusing on our clients’ needs.
MARKETING AND BUSINESS DEVELOPMENT MATERIALS AND SUPPORT – 7% mentions
I’d like to see more marketing material which isn’t heavily bias towards the company producing the information. I understand that branding is important however, often information in marketing material is largely taken over by branding. A Back to Basics, simple approach to providing factual product type/claims examples and similar information would additionally be more useful to give to clients at the fact finding and info gathering stage without appearing to be pushing a certain product or brand which could potentially be seen as going against the best interest’s regulation and FOFA advice.
More material to help clients understand the importance of insurance and how regularly insurers pay out.
New business generation.
I would really like to see more claims and marketing material available online at insurers’ websites e.g the amount of claims paid, average number of people claiming etc.
ENHANCED ADVISER FOCUS – 7% mentions
Improve adviser relationships and be more honest with them.
The LIF is destroying the good relationships that advisers and their preferred life companies have built over many, many years. REAL SERVICE, as opposed to lip service, is sorely needed to mend these relationships.
CLIENT RETENTION SUPPORT – 3% mentions
Monthly claim report with benefit paid and how it’s assisting the family to survive in a time of need. WE must keep confirming with the client the reason they pay the premium. This could be an app for the phone a claims app update weekly with a running balance.
Assistance with retention of clients and easier processes to make changes to existing covers.
COMPETENT AND QUALIFIED BDMS – 2% mentions
All the major companies offer high quality products and services. Because of this, I actually believe the most important thing Life Companies should offer is to employ OUTSTANDING BDMs. They should work with me as I do with my clients – offering amazing service and support to back up great products.
That BDM competency be improved to assist advisers in their myriad of issues as opposed to the we will get back to you attitude which sometimes never eventuates Life companies in general offer quality products but often the troops on board need better guidance.
Dr Rebecca Sheils is Director and co-founder of the Beddoes Institute, which specialises in delivering research and consulting services to the financial services sector.
The Life Insurance Industry Performance Barometer delivers insights into the needs and expectations that advisers and customers (policyholders and claimants) want from life insurance companies and maps how companies perform in terms of meeting these needs.