Stewart Bell, Business Coach from Elixir Consulting reveals what some of Zurich Investments’ top risk writers thought in response to the question: What is the value of risk advice?
Zurich recently engaged 300 of the top risk writers in Australia in a series of workshops, facilitated by Elixir Consulting. The outcomes have been as informative as they have been topical, showing once again the benefits of bringing business owners together to share views, discuss challenges and talk about common opportunities.
For both specialist advisers and those advising on risk as part of a wider offer, there was reflection on strong growth, which is forecast to continue. Developments with FoFA also suggest less immediate interference from legislation. This, and other trends, has seen the value of risk businesses grow compared with other business models. These are generally seen as good times.
As with all boom markets, success attracts new players. More advisers (and other professionals) are entering the insurance space. Institutions have given focus to risk. However, from a competitive perspective, the key workshop discussion was around direct insurance.
Whether the increasing profile of direct insurance is a bad thing (stealing market share) or a good thing (increasing consumer awareness of a need) polarised opinion. Extensive advertising spend, especially through pay TV, certainly shows intent to grow quickly. However, for the time being, that growth is relatively slow (19% in 2011). The majority of workshop participants indicated that they had already exceeded that growth on a year-on-year basis.
Riskinfo magazine’s recent poll of their readers (predominately risk insurance advisers) found 47% concerned that increasing direct insurance sales will have an adverse impact on their business’s future growth and profitability. Our own workshop participants’ views varied from ‘mildly concerned’ to ‘rather non-plussed’.
Whilst they were very clear that consumers with very limited needs and simple personal situations may be well-served by direct insurance, they were just as clear in their belief in an enduring need for quality advice. They also indicated that – given the opportunity to talk to the customer – it was easy to sell against a direct offering.
However, one consistent concern was the potential misinformation being spread by promises of automatic acceptance and the failure of direct insurance to explain many key concepts relating to how insurance works. A little knowledge can be a dangerous thing.
Therein lays a challenge. If consumers are being told, in their own homes, how easy it is to self-assess insurance needs and implement via the convenience of a telephone call, how sure can we be that the benefit of engaging a professional risk adviser is also understood?
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