Why a life and health adviser likes providing travel insurance advice - for free

Talking with an adviser the other day I was told why they like to offer travel insurance advice - even though they make no money from doing so. What they do is maintain a one page guide to travel insurance, and on the back, provide a comparison of the major travel insurer's policies, including the key sub-limits and exclusions. They update it quarterly and mail it out. Apparently its a hit. The reasons they give are: 

  1. Their best clients travel overseas every year, so they are always interested, and grateful for the input into the decision-making process
  2. It's added value, and completely independent because the adviser doesn't sell it, so its a great trust-builder
  3. It demonstrates expertise, showing the kind of thinking the adviser puts into their other work
  4. It reminds the client that the market is always more complicated than it first appears - underlining the need for advice
  5. It is a simple way to introduce wider concepts - such as excess levels, how much self-insurance one is comfortable with, and what service levels you are looking for from an insurer


"All kinds of insurance" and other marketing fails

If you are one of those insurance advisers that has written on the back of their card that you "specialise in all kinds of insurance" then I'm sorry, but I think you need some new business cards. You aren't specialising if you do everything.

It's easy to get caught up with the idea of being attractive to large numbers of people. There are about 2.7 million kiwis that can afford and probably need some insurance. Perhaps you feel that you don't want your business card to turn any of them away. But that isn't your big problem. Largely, these people are apathetic about insurance as recent FSC research painfully underlines. Besides, you don't need that many - you need just a few to really want to deal with you.

That's your big problem. In fact it's our big problem - the industry, insurers, advisers, group providers, HR departments, and more.

While we spend our time obsessed with being attractive to as many people as possible, we become mediocre, and fail to stand out enough to get the attention of even a few motivated souls that would see something that makes them think "that's the one, I think I'd actually like to talk to them."

Diversity vs homogeneity

Seth’s blog discusses the potential difference upbringing and perspective between an author of a piece of work and a reader. Regardless of differences, we can still learn from one another. There is business being left undone because of a lack of focus - the world has changed around us yet if we keep looking with the same eyes, the business will not get done.

nib marketing programmes

Announcing special offers for consumers and marketing support for advisers nib writes:

Dedicated marketing campaigns – More healthy client conversations

We’ll help you start new conversations with prospective and current clients with campaigns that springboard off topics of concern and interest. Like our offer for new members to WIN one of thirty $500 MTA Gift Cards!

Are sales always inconsistent with good customer outcomes?

Of course, my personal answer is 'no'. In fact, I quite like buying things. When I meet an excellent sales-person, who helps me through the process, I am usually very happy. Equally, most people don't like the idea of very pushy salespeople, or those that use very obvious 'sales' approaches. None of us want a world in which it is okay to use power imbalance, coercion, lies and other manipulative or unfair techniques to get people to buy things. But those last things are rare, and almost unheard of in large, conservative, organisations that must maintain a good reputation over decades. They actively try to find and get rid of dangerous people and practices. I think there has been some news about that recently. 

Reading about a union organiser, complaining that banks are relying on branch and call centre employees to follow a script to sell products like KiwiSaver, insurance, mortgage top-ups, credit cards, overdrafts and personal loans, I got the feeling that the only acceptable outcome was zero sales. Click here to read more in Rob Stock's article on Stuff.co.nz

Of course scripts and empathy statements are cheesy if used badly, and awful if used inappropriately. But don't kill sales because somebody needs a sticker on their monitor to remember to offer additional services. Given that most New Zealanders could do with saving a bit more, and having a bit more financial protection in case of a loss of income, I am happy to see more effective selling on those things. Even products that are not normally associated with good financial outcomes can be a force for good. A credit card or overdraft is cheaper and better than a payday lender - and I would rather it was sold responsibly by a well-regulated organisation than not. Even this misses a wider benefit to society. When there is a dynamic and competitive market-place for credit products the consumer wins. So, less sales activity means less competition and poorer products for all of us.


Obstacles to buying financial protection

Damien Green once co-sponsored a study that found that 19 in 20 working age people did no see protecting their financial future as a priority. This is a form of ‘cognitive dissonance’, people know that they should do something but not. Green advances three reasons for this form of behaviour:

  • Applying a high discount rate to distant future events
  • Lack of trust
  • Belief that the state will provide

To counter these, Green suggests focusing on customer experience, intermediary educators and instigators, engaging in public affairs, and developing trust. Click here to read more. All those look like intensive and engaging ways to work with the market at large, and individual customers in particular. It is a continual process, relentlessly working against a number of easy choices to defer, deny, or delegate responsibility. Lots of work. 

Fidelity Life Business Development Strategy

Fidelity Life has set plans to expand the number of business managers and support staff. They have begun the expansion process by appointing new Business Managers and Business Account Manager. The expansion plan is a follow up of a new sales and support model Fidelity introduced in December last year to ensure advisers achieve better business goals and ensure better customer outcomes. The new model resulted in the development of Business Manager and Business Account Manager roles. The role of business manager has been filled by Jenn Quinn and Fidelity is expected to shortly announce the names of the other Business Manager and the Business Account Manager.


Adviser Businesses: Opportunity is Among the Uncertainty and Change

Changing requirements for adviser businesses put pressure on everyone, but these changes could create winners and losers in the advice world in particular, as well as the wider insurance sector in general. Some advisers will identify opportunities while others will find the pressure overwhelms them – and so they will make a decision to leave.

I am concerned that rushed change, often poorly designed, could damage the market. That worry applies not just to legal and regulatory change – such as a Supplementary Order Paper running to well over 100 pages – but also to industry reaction to the new law. I am particularly worried about reducing the supply of advice to clients and pushing some out of the advice sector.

But you may also find great opportunity in change. Could that be you?

The advice business that is more likely to succeed will have one or more of the following characteristics:
• A strongly defined advice service with clear value to the customer
• Strength (or scale) in a particular territory
• Well-organised marketing processes, and some experience of marketing automation
• Compliance assurance processes that provide evidence to managers of good adherence to advice standards
• Good governance processes, with effective oversight of how advice is given, how insurance providers are selected, and how clients are served
• Access to capital
• Most of all: an optimistic frame of mind about the opportunities that may emerge
Of course, even the best advice businesses usually need to work on one or more of these, and most need to do some work in each area.

Transplanting investment-focused advice processes to an insurance or mortgage advice business can fail – because the importance of the emotional connection to the client, their need for cover, and knowledge of insurance products is lacking.

Forcing your advice into a process designed by a technology provider can fail too – because systems design isn’t the same as service design. The problems of failing to focus on the customer and their journey through the process of purchasing advice is often lacking.

Taking time to work on these areas of your business is vital, however, because:
• If you know you have strong advice processes, a good compliance assurance plan, and good governance, you will have nothing to fear from the new compliance regime
• If you have good systems, scale, and operational efficiency then you can cope better with any changes, and also look for growth opportunities
…and there will be opportunities to grow – if you understand your balance sheet and have access to capital, you may be surprised at the opportunities available over the coming years.