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What SMEs think of life insurance advisers

Asteron Life has just released its annual survey of SMEs. Find out how life advisers compare to their business counterparts.

Wednesday, September 25th 2019, 6:00AM

Advisers play a significant role in helping New Zealand’s small business owners to find the right personal insurance cover – but more could be done to boost their confidence in the industry, a new survey shows.

Asteron Life has released its SME Index for this year, which surveyed more than 900 business owners.

It found that small business owners were wary of insurance advisers, and trust in the sector was declining.

The survey found that 95% of those SME owners had life insurance but only 54% had income protection, 47% trauma cover and 46% TPD.

Females were slightly more likely to have some form of life insurance, with 36% of all females having some form of cover compared to 27% of males. Age made little difference.

Of those with cover, 34% had used an insurance or financial adviser to guide them. Another 19% had been helped by an insurer or bank and 24% had worked it out themselves.

But SME owners were more likely to be satisfied with their business insurance broker than their life insurance adviser. About 63% said they were satisfied with their business broker while only 40% said the same of their life insurance adviser.

The report said that could be due to the level of involvement the advisers had with clients.

Just under 30% of clients said they had little to do with their insurance adviser while only 37% described working together with an adviser to review their choices.

There was a clear correlation between levels of satisfaction and levels of involvement: only 16% of those who had little to do with their adviser claimed to be satisfied, compared to 51% of those who worked together with their adviser.

SME clients said they valued things such as advisers providing in-depth information and analysis and checking up on changes to a client’s business.

“While increasing personal contact with clients would seem to be one way to improve client satisfaction, this is not always easy for advisers with already heavy workloads and looking to simple ways to maintain contact without increasing time commitments is ideal. There may be opportunities for advisers to work more closely with insurers to leverage materials or communications insurers produce that could add value to customers and reinforce the adviser relationship,” the report said.

Of those with an adviser, 46% said they engaged one because they trusted the adviser to get the right cover at the right price. Only 12% acknowledged that they could get access to better policies through an adviser.

Overall, 26% of SMEs with life insurance said they could not trust insurance advisers. However, those with advisers were significantly more likely to trust advisers than direct buyers, with only 12% of adviser users saying that they could not trust advisers, compared with 41% of direct buyers.

Asteron’s report said the decline of trust had been a major trend in recent years.

Businesses with advisers were also more likely to have made a recent claim and were, in general, more aware of broader risks.

Tags: Asteron confidence Income Protection insurance Insurance Advisers Life insurance SME TPD Trauma

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