Fidelity Life have announced the appointment of Craig Winterburn as GM Retail Sales & Key Partnerships, a newly-created role. Fidelity are still working through the recruitment process for a new Chief Distribution Officer.
If, like me, you are a salesperson, then you have some experience of people who are rigid in their ideas, and how hard it can be to change them. Merely providing new data doesn't usually work. A bit of a shame that, but people tend to view what they know already as more reliable - for obvious reasons when you think about it - and the more time they spent acquiring that knowledge, the more weight they apply.
If you have ever had to change your mind about something - and I sincerely hope you have, since continuous perfection is unlikely - then you may also know how hard that it is. So this article on getting stuck in your ways is a great thing to read if you want to explore new ideas, and learn more about how to change your own mind and the mind of others. Link.
Given the complexity of many insurance documents, including the presence of some dizzyingly difficult medical terms, it is surprising to discover that the greatest difference in documents could be these two little, easy, words "and" along with "or".
You see, at a casual glance a good definition can look a lot like a bad one. There is a long list of requirements, such as ECG changes, elevated enzyme levels, typical chest pain, and so on.
The tough definition links all the criteria up with 'and' you must demonstrate this, andthat, andthe other. That reduces claims. The easier definition is similar, but they let the client qualify under any of the criteria making each an alternative: you can claim if you were this, orthat, orthe other. Making it much easier to claim.
So next time you are looking at definitions with several criteria remember the difference between "and" policies and "or" policies can be quite a lot in terms of the claims paid.
Partners Life have announced the appointment of Andries Van Graan as the General Manager Sales. Andries will leave his current role as General Manager of Newpark Group and start his new role on the 12th of December.
Looking at some recent quote data we have noticed that sums insured are not tracking up in proportion to incomes. In fact, nothing like. This phenomenon has been noted before: it was picked up in the Massey research into insurance levels conducted about five years ago.
This is what we mean: for a couple with younger children where the average (mean) sum insured for life for an income of about $50,000 p.a. is about $510,000 the mean for those with incomes greater than $103,000 (more than double) is only about $830,000. It varies somewhat according to household composition.
But seeing it in the data from adviser quotes made me look harder at it – and wonder at the implications for needs analysis. There may be ways to change how you arrive at your ‘ideal’ or ‘recommended’ cover amounts that may help to nudge the cover values up.
The first is that the peer group for life insurance sales may cross income boundaries – meaning that people with higher incomes are averaging down the amounts of cover they think about because they are including lower income friends in their comparative set. Unlike, say, the market for cars, it is not obvious what ‘people like us’ buy in the way of insurance. If the insurance industry managed to make insurance an aspirational good which gets seen or talked about then this problem would disappear.
The second is that basing your ‘ideal’ or ‘recommended’ cover amounts heavily on income-based measures will widen the gap between your recommendation and the cover amounts likely to be eventually selected – maybe creating a ‘shock’ when you discuss it with them.
The third is that you may be better off building up recommended sums insured with fixed cost components rather than using income-based measures. Focusing on clearing debts, providing education funds, funeral expenses, and bequests should be added and agreed before then adding an income-based measure for the balance of the cover recommendation.
As we are now working on version three of the needs analysis in Quotemonster, if you are interested in this area please contact us.
This article on LifeHealthPro outlines four major sales mistakes that should be avoided by advisers to help improve sales. Our personal favourite is the danger of leaving a client without any clear idea of what will happen next, or even when the next appointment will take place.
This article from thisismoney.co.uk gets under the hood of many short-term travel, parcel, and warranty insurance products. You should read it. I have several colleagues in this industry who are convinced of the value of 'micro-insurance' of this type to re-start the engine of growth in the industry. But not if the policies are all this bad. The other thing that struck me was the use of long documents almost designed to have the consumer skip over them. Take this example:
"[in the]...terms and conditions 40 items are exempt, including electrical goods, antiques, jewellery, food and anything made from metals, ceramics or glass. It means barely any items will be insured under the policy. Its website does ask for details of what will be included in the parcel, but it won’t stop the customer buying a policy if they list an item that’s excluded"
Well, that simply is not good enough. The reputation of the insurance industry will remain low and continue to fall with sales practices such as that.
Susan Edmunds writing on stuff.co.nz has this piece on the sales of life insurance through advisers. The article includes comments from Naomi Ballantyne of Partners Life, Fred Dodds of the IFA, and yours truly. Link.