Taboo conversation could tap billion-dollar market

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It is estimated that Australians are underinsured by about $972 billion and advisers are backing away from tackling the problem due to a fear of seeming ‘opportunistic’.

In 2012 the life insurance industry paid about $5.4bn in death and disability claims, according to APRA. One industry expert says at the time of these claims is when advisers should be looking to tap into Australia’s underinsured market. Tim Browne, general manager of retail advice for CommInsure says that more can be done at the time of a claim to engage with the clients and determine if there are any other people in that client’s company or community that an adviser should approach.

“I think it’s at that moment where family and friends are most open-minded and most concerned about having their insurance needs attended to,” says Browne. He says that clients appreciate the value of insurance most at the time of a claim, and that they would be the best spokespeople to people in their community.

There are good emotional reasons why advisers aren’t taking advantage of this opportunity at the moment. “You’ve got to have a deft touch at those times to not appear opportunistic, but the need is there and the alternative of not doing something because it didn’t feel appropriate has the genuine potential to see some of these individuals underinsured if something was to happen to them.”

Browne can say from personal experience, that not approaching someone “because it didn’t feel right” can result in family or friends being uninsured when they need it most.

He says there is some merit to the idea that advisers reach out so much to strangers that they overlook those close to them. The good thing about the insurance industry is that there’s a raft of technological support that can help an adviser to establish the need and to provide statistics that can help in those conversations. Browne says that it is one of the more sensitive issues that planners will have to deal with, but that conversation is important.

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