Advisers are writing an increasing majority of their insurance business through just one provider, according to the latest findings from researcher, Investment Trends.
The July 2013 Investment Trends Planner Risk Report shows that advisers now write 64% of premiums through their most-used insurance provider. This figure has risen from 54% five years ago, and is also up on last year’s result of 61%.
According to the research, this trend is being driven in part by advisers deciding to reduce or cease their usage of an insurer. 35% of planners surveyed said they had stopped supporting an insurer during the past 12 months, with a further 29% saying they had scaled-down their use of an insurance provider in the same period.
The average number of insurers used by planners is now 3.4, down from 3.8 in 2012.
The top five insurance providers by number of primary planner relationships are:
- AMP
- OnePath/ANZ
- AIA Australia
- TAL
- BT Life
“It has become even more crucial to be a planner’s most-used insurance provider,” said Investment Trends Senior Analyst, Recep Peker.
It has become even more crucial to be a planner’s most-used insurance provider
Mr Peker said the competitiveness of the insurance market meant there was a very strong relationship between satisfaction and switching behaviour.
“Satisfaction is crucial in the insurance space, as business is not very sticky and planners can easily stop writing new business on an insurance provider,” he explained.
“Relative to their market share, insurers with lower overall satisfaction ratings from their users experience a higher proportion of planners leaving or switching to other insurers.”
The top three insurance providers by overall planner satisfaction in 2013 were:
- TAL
- Zurich
- Macquarie Life
The report found that advisers were more likely to leave an insurer if they felt they lacked business development support.
“Good BDM support is the top selection driver for becoming a planner’s most-used insurer,” explained Mr Peker, adding that it was crucial for both retention and acquisition.
The other ‘key battlegrounds’ for insurers over the coming year, according to Mr Peker, are further enhancements to underwriting and technology.
I must be different. Claims experience to us is a key factor. MLC and OnePath have been particularly high on our list here. That said, TAL and OnePath get most of our business because they have such a good range of cost-effective contracts and will do almost anyone.
We’ve used all eleven major players in the last couple of years and will likely continue to do so.
I cannot see how choosing just ONLY one (or even 2) insurers can meet ” Best Interests ” requirements unless you are a bank adviser.( ASIC seems to let the bank adviser force avoid best interests )
Try explaining in court how you met the “reasonable enquiries ” test when the one insurer offered exclusions, while one you used to use ( from whom you still receive renewal commisions for existing policies) may not have offered an exclusion and the clients claim would, in all probability, been paid.
We use all major insurers, some less than others. Recently one life office whom we rarely use beat all comers because of the clients’ ages (life only so no product differentiation).
Also when there is a difficult case for health or other reasons we shop it to all life offices. We feel we owe it to the client to do this.
We love competing with dealers with restrictive lists as we beat them all the time.
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