Advisers must take responsibility for New Zealanders’ underinsurance
New Zealanders are seriously underinsured – and the adviser industry has to take its share of the blame says ING Life’s managing director Naomi Ballantyne.
Wednesday, September 28th 2005, 7:30AM
by Rob Hosking
“There’s no doubt we are way under insured, and there’s a definite need to get aging advisers who are doing well enough churning clients to chase new clients,” says Ballantyne.
A recent Standard and Poor’s report on the New Zealand insurance sector was pessimistic about the prospects of growth, saying that there is too much emphasis on churning old clients and not enough on generating new business.
“This is huge issue for the industry and one we are going to have to deal with,” says Ballantyne.
She says advisers who rely on this approach are fooling themselves. She fears the result of this approach in a few years will be more industry rationalisation, with more insurers merging or pulling out of the New Zealand market altogether.
“We have advisers who have worked in this environment for so long they don’t know how to change.
“And some of them think they can sell their client base in a few years’ time and retire but they are fooling themselves –there wont’ be anyone to sell it to.”
Ballantyne says historically there was much more industry commitment to educating people about the level of insurance they need, but that had gone by the board over the past 15 years or so.
“The products we sell these days are quite complex and they need to be sold to meet individual needs of the client.”
Buying insurance across the bank counter – typically when signing up for a mortgage – tend to be off the peg type of products and often mean people fool themselves into thinking they are fully covered when they are not, she says.
“The products we sell these days are not simple products. They need to be sold by advisers rather than bank tellers.”
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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