Client perception: Room to improve

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The AFA’s new white paper, The Value of Protection, reveals startling misconceptions that clients have when it comes to income protection and making a claim, and shows how advisers can improve trust and confidence in insurance.

Reflecting on the study, AFA CEO Brad Fox says there is room to improve for advisers, particularly when it comes to their relationship with insurers.

“There are some advisers that will present themselves as playing the role of ‘keeping the insurer honest’ at claim time,” says Fox. “Rather than presenting a collaborative approach to the consumer, it almost sets up a combative approach, and that combative expectation is one of the things which deters the consumers from wanting to have the insurance in the first place.”

The study, conducted with the Beddoes Institute and BT Financial, showed a distinct lack of trust, which was driven by lack of transparency, a view that insurance companies focused on the dollar, past claim experience and negative media coverage.

“There is a lot of fine print in the policies. This could be made more obvious,” said one client.

Another said, “You don’t know what their vested interests are.”

The study concluded that it was the adviser’s role to build confidence, from the time of sale and throughout the life of the policy, that the insurer will deliver on the promise of the contact – but without promoting the adviser as ‘keeping the insurer to their promise’.

One of the major misunderstandings by clients was the belief that they need to go straight to the insurer when making a claim, rather than coming through their adviser.

Fox says that it is vital for advisers to make sure their clients have a clear understanding around the Privacy Act and understand that the relationship between planner and client is a trusted relationship.

“The advantage of using the adviser is that the adviser already knows the insured,” says Fox. “What stood out in the research is that consumers want the emotionally intelligent approach around claims; they want to be understood, they wanted to be heard, they wanted empathy. It’s much easier to get those things from somebody you already know.”

“A number of people have a financial adviser that lives and works in their local area…depending on the cause of claim, they may have concerns around privacy.”

Absence of positive insurance stories was seen as compounding the effect of negative press. If you have an insurance claim story you would like to share, please email

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