In a first for our Riskinfo Round Table series, we welcomed reinsurer Pacific Life Re to the table to share ideas with your adviser peers about the issues of the day and the role that reinsurers can actually play in working with life companies and advisers to enhance the end-to-end life insurance advice process.
- Pacific Life Re Voices
- Andrew Gill – Managing Director, Pacific Life Re (Asia and Australia), Co-host
- Tyson Johnston – General Manager, Pacific Life Re (Australia)
- Adviser Voices
- Marc Bineham – Adviser, Noall & Co, National President Association of Financial Advisers
- Rob Vitnell – Adviser, Victorian State Manager, Australian Financial Risk Management
- Amie Baker – Adviser, Rekab Advice
- Kathryn Fitch – Adviser, Evalesco Financial Services
Part 1 – How do Reinsurers Add Value for Advisers and Advice Businesses?
What contribution – what value – can reinsurers add to the retail insurance sector? This conversation may help to answer these questions, as it did for some of our panellists.
Getting straight to the point, our panel heard first-up from Pacific Life Re MD for Asia and Australia, Andrew Gill, who noted that insurers are looking for greater support from reinsurers than the current ‘vanilla’ services such as capital, pricing and operational support. This is in line with their appetite to further improve their propositions to customers and advisers.
In terms of value-add, however, Andrew emphasised the importance of creating a seamless and simple process across the value chain, in supporting life companies, advisers and ultimately the end customer.
For example, Andrew referenced:
- The use of current and emerging technologies to try to make the underwriting process more streamlined and simpler
- Using similar technology advancements to enhance claims processes for companies, advisers and claimants
- For complex cases, enabling the allocation of skilled capabilities of senior underwriters to make new business applications easier and simpler, in an endeavour to get more people covered more quickly
Andrew said the combined effect of these initiatives would contribute to making the role of advisers and the services they offer their clients easier. He says the greater efficiencies inherent in these improvements is how reinsurers can deliver added value for the retail advised insurance sector.
He referenced the correlation between the current Australian market and the shake-up of the life insurance market in the United Kingdom as a result of the UK Retail Distribution Review (RDR) recommendations, which came into effect at the beginning of 2013.This resulted in fewer new advisers coming into the sector replacing the greater volume of advisers who were retiring.
Andrew related how UnderwriteMe’s ‘Protection Platform’ was introduced via Pacific Life Re into the UK market around this time and helped to reduce the impact of the exodus of advisers, as it could accommodate multiple life insurance offers, rather than having the adviser needing to run individual quotations.
working hard to better understand our customer’s customers holds great value for the reinsurer
This was a great example of how reinsurers contributed to making the whole process simpler, “…and I really see the role of reinsurers also helping to increase the size of the pie, which is really important for everyone,” he said.
Responding to a question about how reinsurers can work better with or add more value direct to advisers, Andrew said working hard to better understand our customer’s customers holds great value for the reinsurer. He said this applies to both the personal advice sector as well as the group sector via fund trustees. “If we understand our customers’ customers better, we stand a better chance of serving our customers’ needs.”
Andrew said that in the UK today, retail advised customers can answer a single set of underwriting questions – reflexive questions, offering access to multiple life insurance offers, which can lead to a ‘Buy Now’ button. “But we haven’t got that in Australia as yet,” observed Andrew, where instead each life company runs its own underwriting rules engine. “In the UK,” says Andrew, “…it took a while to get to that model. That’s been a five-year journey, where now in the UK, most retail insurers are using that model.”
we’re trying to make the whole life insurance advice process simpler
General Manager, Pacific Life Re (Australia), Tyson Johnston, told the adviser panellists that while Pacific Life Re is two steps removed from the advice process, “…a big part of our strategy is to better understand advisers so we can provide greater value to our insurance partners..
“Our purpose is to be an enabler for our clients to help them in turn to facilitate selling more insurance. We’re trying to do that in a few ways, such as being able, as a global reinsurer, to access insights from around the globe and in having access to capital, which allows us to write larger, more unusual risks. But in particular, we’re trying to make the whole life insurance advice process simpler,” said Tyson, effectively reinforcing Andrew’s message about the critical importance of simplicity.
How does a reinsurer go about achieving this aim?
Purpose Built Technology and Targeted Efficiency
“We generally try to make this happen through technology that understands the needs of the whole value chain and those that support it,” said Tyson. “It starts with the advice process and flows into underwriting and claims.”
Evalesco Financial Solutions adviser, Kathryn Fitch, indicated her surprise by all the levels of activity in which Pacific Life Re add their expertise. “And I’m not sure that many advisers know that either,” she said.
Kathryn suggested advisers should get more involved directly with reinsurers during the product testing phase, to which Rekab Advice’s Amie Baker responded that she recently had that experience with Integrity Life. She referred to testing that was undertaken with advisers by Integrity Life for underwriting pre-assessment which took place before the quotation was created.
Amie thinks this is a more efficient way to go, because she said in her earlier years as an adviser, she would get through the quotation processes only to discover her client wasn’t insurable or would be subject to significant exclusions or loadings.
“So now I get it done upfront – now that we’ve got all the tools and software that will allow us to be more efficient in what we do, including being prompted by the software as I go through the process,” said Amie.
Tyson said this was a great example of how reinsurers add value because this particular preassessment tool that Amie references, UnderwriteMe’s Underwriting Rules Engine, was something developed and introduced to the Australian market by Pacific Life Re. The platform brings some of the more challenging underwriting questions upfront to allow information that was more critical in the assessment process to be provided nearer to its beginning, leading to greater time efficiencies and less time wastage.
Amie told her peers she has developed her own initial preassessment fact find over the years but had kept adding questions to it to the point where it became half the size of an application itself. She’s now happy that a simple, online preassessment tool exists so she doesn’t have to keep evolving her own preassessment questions.
Kathryn and Amie agreed they did not appreciate the extent of the influence of reinsurers on their day-to-day operations and processes.
Part II in this Round Table series will be released shortly and will reflect on the various product issues demanding attention, including pricing and sustainability challenges impacting all parts of the life insurance and advice sectors…