Partners Life appoints Chief Legal, Risk and Conduct Officer
Reflecting the communities we serve

Joe Average Insurance Advice

I personally dislike averages. It reminds me of the story about three economists who went to the archery range. The first one fired an arrow and missed the target a metre to the left. The second shot their arrow and missed a metre to the right, then suddenly the third, shouted "bullseye". All advisers are different, with different stories about what got them into the business, how they like to work, their successes and failures, and more. I like hearing them and learning more about the business through every related experience. Of course there are similarities. Group enough of them together and you have types. They don't do justice to the people, but the boundaries can be drawn.

In the world of insurance advice, one type is the small insurance advice business. Suburban office, only one adviser, maybe two, and an administrator. Sometimes their office is allied with, say, an accountant, finance broker, or real estate agent, but more often than not - it is stand alone. They do not tend to stray often outside the insurance area, preferring referral relationships rather than trying to offer multiple lines of business themselves. If they do offer another service, it will usually be just one of either mortgages, some personal lines fire and general, or no-advice KiwiSaver placement.

To the extent that the businesses are similar, the challenges are also similar. They main ones being growth, scale, resilience, and succession. Each of these is connected. A larger business is more resilient and can afford to hire specialists, with more staff, more succession options are available. Growth is needed to create options for all these challenges. Even if an owner has no desire to run a team, expand into new areas, or bring in outside investors, they usually want their income to rise above the rate at which costs rise. So ultimately the challenge of how to grow underpins all of these common business issues. Growth usually entails pain. You have to experience enough discomfort to engage in the learning, the investment, and the risk-taking required in order to grow. Unearned growth is either luck or inflation. It is worth being suspicious of both - because 'easy come, easy go'.



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