tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Tuesday, July 14th, 1:51PM

Insurance

rss
Latest Headlines

Transparency, simplicity 'key for insurance growth'

More needs to be done to ensure that insurance products and advice are transparent and easy to understand, industry commentators say.

Thursday, September 28th 2017, 6:00AM 1 Comment

A panel at the recent Financial Services Council conference reflected on the state of New Zealand’s insurance industry.

Fidelity Life chief executive Nadine Tereora said insurance products were still very complex.

“They use a lot of words that people don’t really understand, and we expect to sell those products. Part of that simplicity equation is that we need to simplify what we do, and we need to incorporate plain English. We also need to educate very early on,” she said.

“We need to think about starting at the early years when we don’t have the traditional triggers anymore; this is where behavioural economics is really important. It would mean that we actually set people up, right from the early stages, to value the important role advice plays when they need it.

“Also, we should create pathways that are simplistic and easy to understand, as well as identifying the right time to seek advice. The role financial advisers play in New Zealand is really important, because they’re a big part of education, in helping people understand what they need and the cost they can afford. We don’t always focus on that."

She said products needed to be designed that would do the right things at the right time for clients. Their need for insurance products would start low, then peak as they got older, before dropping away again, she said.

Affordability was an issue, the panel was told.

"How are we addressing that affordability? How can we help advisers do their jobs really well? By providing them with economic data that actually helps them service their customers and, ultimately, helps us as an industry build trust," Tereora said.

She said transparency around things such as commission was important to build trust in the sector.

NZIER chief executive Laurence Kubiak pointed to his earlier work for Sovereign, which showed that external agents could cost as much as 100% more for an insurance firm than sales executed by in-house staff.

Commission could make up 40% of their annual costs. But he said reducing commissions would not make much difference to what clients paid.  If commission dropped by 25% to 50%, premiums would only drop by 12% at the most.

Tereora said a big issue was that there was still an underinsurance gap in New Zealand, despite the sector’s best efforts.

“We have to do things differently as an industry. The big brands, product providers, have to lead the charge on that and support advisers and customers in terms of finding better ways to reach them and help them plan for things when they go wrong.”

More attention needed to be paid to the extra that advisers could add, she said.

“We’re very focused on the workings of the in-depth process of giving advice, if you even make a sale. Post-sale, we’re very focused on commissions. We need to think about the absolute importance and value of human interaction – sitting down and really getting quality advice around their specific needs, which is not always achieved through a product that is sold in the direct nature or digital pathway.”

She said advisers did a fantastic job for clients and built a lot of trust and rapport with a lifelong connection.  “They’re there well beyond the sale.”

 

Tags: Fidelity Life financial advisers FSC Insurance Advisers Nadine Tereora Sovereign

« Newpark paying for members to do Level 5 papersAsteron launches online application tool »

Special Offers

Comments from our readers

On 29 September 2017 at 11:11 am Referee said:
Must agree with Nadine's comments. The younger generations need new simplified products so they have a choice.

For too long, the focus has been on improving existing products, rather than innovation directed towards the need of Gen X and Y. Starting low and peaking as one gets older is what they need - yes, it's about affordability.

Certainly, advisers can play a huge part in educating consumers but more and more people do their research before approaching or accepting advice from them. This means the life insurance industry, like the FSC, have to do more to supply consumers with independent information, e.g. what Life-Info has begun.

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
Insurance Briefs

Less stressed during lockdown
New Zealander’s health and wellbeing had surprising benefits from the Covid-19 lockdown.

Southern Cross supports new safe haven for at-risk pets
Southern Cross Pet Insurance has teamed up with Pet Refuge to provide temporary shelter for animals affected by family violence.

nib Foundation supports Lifeline to the tune of $150,000
To support the growing mental health needs of Kiwis emerging from the Covid-19 pandemic, Lifeline Aotearoa has increased its service capacity thanks to a $150,000 grant from nib foundation, the charitable arm of nib New Zealand (nib).

Southern Cross halves staff numbers
Southern Cross Travel Insurance is slashing its staff numbers from 90 to 45 people.

News Bites
Latest Comments
  • [The Wrap] Dealer group land like a game of Risk
    “Excellent. I've said for a long time that Dealer Groups were a necessary evil. Especially to the new entrant into the...”
    1 day ago by BayBroker
  • Harking back to the old days
    “Tactical move by CIGNA and looks like they have a lot of bench strength now in sales, underwriting and product / pricing...”
    4 days ago by hitting rock
  • Greens want ACC extended to cover sickness
    “Never happen. The Greens are such an aspirational bunch. Must all the weed. They 'want' all sorts of unlikely things...”
    4 days ago by All hat no cattle
  • Harking back to the old days
    “Really positive news. NZ has been blessed by many successful leaders and it is good that their skills can skill be utilised...”
    4 days ago by Francis L
  • Harking back to the old days
    “I dare say Cigna just got that extra grunt it's been looking for....”
    4 days ago by Matron
Subscribe Now

Cover Notes - Specific news aimed at risk advisers

Previous News

MORE NEWS»

Most Commented On
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com