- No (68%)
- Yes (23%)
- Not sure (9%)
The launch of the new Coles Life Insurance offer has received little support from the financial adviser community.
As we go to print, our latest poll sees 60% of respondents saying they do not believe the entry of Coles into the direct life insurance market is a positive move for consumers. 29% have given their support, while 11% are on the fence about this new offer.
Advisers have focused on three areas in their comments:
- Price – not competitive compared with advised, underwritten retail products
- Motivation – in it for reasons other than as stated
- Non-disclosure issues – the broader concern voiced about most direct insurance offers
However, there has also been an element of pragmatism expressed:
“If you had a mass number of consumers walking into your business every day that are in need of a certain product, you would start to stock, advertise and sell them that particular product”
However, the same adviser added…
“…if it means more Australians are insured and less of a burden on the public purse, then there is room for them…”
And this:
“Coles also has metadata … that will allow them to drill down to target market their sweet spot.”
As always, its over to you- vote now and make your voice heard, as our poll remains open for another week…
The facts are, as always, they will hook a few who want a quick sale to feel better. The policies will fall off as everyday expenses increase ( a couple of visits to a doctor will do that ) and motivation fades
The question for advisers, more and more in our ever increasing compliance world, is can we afford to have the target market of Coles as our clients
There is fundamental agreement with the statements outlined in this latest article and my main concern is about non-underwritten policies. All it seems to be is about the almighty dollar and NOT about the client’s best interest. If you take “Best Interest” to the nth degree, then you would have to say that advising certainty at claim time and genuine peace-of-mind would rank right up there and that’s NOT what we see with these direct offers. Over the long-term…in fact we are seeing it now…the likelihood of an insurance company activating the “get-out-of-jail free” card (pre-existing condition) to deny a claim is very “Real”. As this happens more often it will only exacerbate the under-insurance problem because consumers will have less and less confidence in insurance companies. The knock on effect will be that we are all tarred with the same brush when it happens. And that is just the effects of denied claims let-a-lone the doubling of Industry Funds and in-particular group cover premiums we have seen recently.
The other concern while I’m writing is the issue of churning. A client was recently told (by an Adviser) that he could save money if he switched to another company and he wouldn’t lose any benefits by doing so. This was a total miss-representation as the client was not informed about the 3 – year non-disclosure clause resetting. If you don’t know about the 3 – year non-disclosure clause it’s because no-one wants you to know as it stops churning and when churning stops, then no-one makes any money…not the adviser…or the licensee. Licensee’s will not make it mandatory in an SOA because as soon as they do, then advisers would walk out the door to another licensee who doesn’t make it mandatory. When you inform the client what the 3 – year clause really means at claim time, then they are very reluctant to want to switch…even if it means saving money. That’s in someone’s best interest…you never know if this reduces churning, then it may actually reduce premiums because insurance companies aren’t shelling out upfront commissions as a result and that in turn may increase the numbers of Aussie implementing insurance.
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