by Nadine Tereora
There's no doubt that coming from an intense back-office environment, focusing on the operational part of the business, to what we call the ‘sharp end' of insurance -the adviser businesses and groups, and the connection with the consumer market - brings a fresh perspective, especially in a new regulatory environment.
Essentially, no one - the adviser, the insurer, or the reinsurer - gets paid until the business gets issued, not to mention the client getting the protection they want.
It seems to me what advisers really want is to be paid fairly and efficiently for the work they do, and to comply in this new world. Let's face it - you can chase whatever commission you like, but 200% of nothing is still nothing; the business has to go in first.
Adviser groups now make up about 80% of the insurance distribution market, and some may be struggling to deliver the experience relative to the brand promise when considering what advisers really want. If the key reason for joining any group is to improve the customer on-boarding experience in a compliant manner (including getting all stakeholders paid), then many will be disappointed.
However, if a key reason for joining any group is for higher commissions, there may be less disappointment. The irony is the goals should not be mutually exclusive - remember, 200% of nothing is still nothing.
Unfortunately, with all that has changed and evolved in the insurance industry over my 17-year career, many advisers, no matter what structure they find themselves in, still have no better engagement with the operational areas of insurance companies - well, not consistently, anyway.
But advisers are not on their own in creating the customer on-boarding experience. We insurers have to pull up our socks too in the interests of the customer and growing the market. Even in the short time that I've experienced distribution up close, it is obvious that opportunity exists to improve our joint delivery to the customer. It also reinforces the importance of the project I am sponsoring at AIA to streamline this engagement, with the early phases of implementation commencing in late October 2011. By January 2012, doing business with AIA will be very exciting.
There is also onus on insurers to step up for advisers in catering to markets. AIA is doing so in part by looking at areas where, typically, New Zealand insurers haven't ventured. Becoming relevant in the special risk markets, and providing a simple view of process and risk assessment, have been key sources of growth in business and service.
What I'm seeing at the front end is it helps advisers and customers when an insurer is unafraid to look at risk. This might seem self-evident, but think about it: most experienced advisers have operated their businesses by dealing in standard parts of the market. Those parts are what they're accustomed to, what they know intimately and where they feel safe. It's also limiting.
Opening up new avenues, presenting new markets with different risk calculations, affords an opportunity to really build a business for the adviser and the insurer whilst serving the needs of New Zealanders - done well, everyone wins.
A good example is the fishing industry. Professional fishermen have long been considered uninsurable - out in the elements on the back of a trawler, lots can go wrong. It's a similar proposition for long-haul truckies. However, these businesses are often very lucrative, and the owners are big distributors and successful SME operators with the same key-person protection needs as any other.
Moving into these markets, as AIA has done, and offering solutions for special risk candidates, generates a four-fold benefit: to the insured, the insurer, the adviser and the larger NZ Inc goal. For the adviser, it means expansion beyond the traditional insurance markets, and becoming part of the genuine new business growth that comes from playing in new parts of the market. But it takes commitment and a willingness to possibly even learn beyond the product suite of the latest favourite insurer.
Clients, advisers and insurers alike are looking for a solid value proposition, and we appreciate that for many advisers the phones aren't ringing off the hook - one role of the insurer should therefore be to help make the most of every lead, from the market opportunity creation to the on-boarding experience.
Nadine returns to her role as chief administration officer at AIA New Zealand on 1 December 2011.
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