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Help them keep track

Whatever consumers say, most insurers are actually very keen on making sure valid claims are paid. There is a claims manager's maxim which runs "if in doubt, pay out". But consumers are suspicious. Often they think that the insurance company is trying not to pay - and sometimes they may be right, so complaints are valid. Insurers, however, can do more to present their corporate willingness to make things go right.

  • The first is by telling clients the things they can do to make the claim process easier, should the need arise (like good estate planning, organising the location of needed documents, and so forth).
  • Another is helping to make it easy for the client to keep the insurer aware of their location and to find their insurer if they lose track of them.

If such measures aren't taken, there is always the risk that someone else will take them for us - and take their cut too, as this cautionary tale at Insureblog tells.

Online Upgrades

AMP's Lifetrack website has a clear approach to consumers: it's about life insurance. Which makes the message the bridge between a consumer and the company - since both can logically assume that this is the common ground they share with most visitors. It's amazing how hard people find it to build websites aimed at the main interest of the majority of visitors. Link.

Partners Life new quote system online allows you to extend your cover to KiwiSaver. This is a great feature for consumers, and also, I feel should be part of a broader push back against the 'anti-insurance' culture which has its high-water mark in the ban on insurance in KiwiSaver. Perhaps something this ISI could place in its sights.

Money Advice Service? Is this coming, or do we already have it?

Does the UK experience of financial regulation have lessons for NZ in the provision of a state-run "Money Advice Service"? A heavily cut-down narrative runs like this:

  • Much generic financial advice was once given away by banks, insurers, and all kinds of financial advisers as part of their marketing activity to engage with potential clients.
  • Not all of it was good, but most of it was, often because of all their activities this was unconflicted.
  • The UK introduced progressively heavier regulation on the sale of financial products and the giving of financial advice.
  • This increased the costs of seeking financial advice, and also the risks of providing the generic advice to consumers who did not become full clients (because tough penalties are imposed on advisers not following a full advice process).
  • Virtually all 'generic' financial advice was removed from the process at that point, a great loss to many consumers who received a lot of help from such material or commentary from their financial advisers and product providers.
  • The gap has reduced financial literacy as a whole and Government is worried that an increasing number of people are not using many helpful financial products or learning good basic financial management skills.
  • So they have introduced the Money Advice Service. This has met with a lot of hostility from the UK financial adviser industry.

They have some legitimate complaints (the use of the word advice is completely unfair, as the service is strictly limited to the provisiion of information, not financial advice) and some less legitimate ones - such as a fear of creeping nationalisation of financial adviser services. This article from Money Marketing is good on the subject - but so is the first comment below it. Go and read it.

Why should we care?

Will our Financial Advisers Act create such a situation here - or will we manage to preserve the good general information and basic advice that has been available?

Is www.sorted.org.nz our equivalent of the Money Advice Service anyway? It has long since broadened out from offering information about retirement to a wider financial literacy role. Has it hurt the role of financial advisers? I doubt it.

Having said that, it would be a shame if we allowed our shiny new regulatory structure for financial advice to undermine some of the public goods delivered currently, free of charge, from the industry. I'm sure it is possible - but is is probable?


Cavalcade of Risk 131 Now Up

A professionally presented Cavalcade of Risk is now up, number 131 in the series. Emily Holbrook does a fine job with this Cavalcade and also introduced me to a new insurance blog site - "Reinsurance Girl's Blog" who has a lot on the use of social media in her recent posts.

In the main news section of Risk Monitor I found this link to the speech Joe Plumeri gave to graduates, speaking as an "insurance guy" he gave an outstanding address which might have encouraged one or two to revise their view of the insurance industry.

PAA Conference

The Chatswood team (Rob Dowler, Alan Rafe, and I) were over at the PAA conference for the Ask The Expert sessions today. The Conference looked well organised and well attended. From newcomers to longstanding advisers, from sole traders to the owners of large advice businesses, the PAA had them all. Congratulations to Edward and his team. I saw the Partners Life team there in force, and also the Fidelity team, lots of the SHARE folks, Allfinanz advisers, and many, many, more.

Strange Insurance Claims

Here's a graphic which shows some strange insurance claims - but perhaps they won't seem so strange to seasoned insurance professionals like you. Often in some cases - like the man who was distracted by some young lovelies and hurt his nose stepping in front of a bus - they illustrate that insurance companies are cheerfully blind to any moral judgement that might be placed on you, and simply accept that whatever the cause you didn't want to step in front of a bus, it was just an accident.

Hat tip: Insureblog

Insurance claimsv1

Infographic by Confused.com - Compare peace-of-mind life insurance in minutes.

FSPR Guidance

What categories are you registered under - some guidance for advisers. It's a fact that some of the language in common use to describe what some financial advisers do - "broking" for example - have quite different and specific meanings in when you are selecting categories under the FSPR. Check them out in this Download FINAL Guidance Note FSPR high res courtesy of Onepath.