Australian financial planners are becoming increasingly reliant on risk advice to drive business income as increased competition and impending legislation force many practices to rethink their strategies.
On average, the proportion of business income derived from insurance advice has increased to 52.8 per cent in 2012, up from 47.1 per cent in 2011 and 40.4 per cent in 2010, reflecting the shift in focus in the advice industry from investment growth to asset protection.
According to CoreData’s Annual Risk Report, a strong customer focus on both the adviser and client remains the number-one driver of adviser satisfaction with their main risk provider in 2012.
“Competitiveness of cover definitions (income protection)” and “the extent to which the provider is easy to do business with” are the second and third (respectively) strongest drivers of overall satisfaction this year, with both of these attributes increasing in importance from last year.
TAL is CoreData’s Risk Provider of the Year, breaking a three-year winning streak by Asteron. A total of 11 risk providers qualified for this year’s Life Company of the Year Awards. Macquarie received the silver in 2012, marginally in front of Asteron, which took the bronze. AIA and Zurich rounded out the top five.
The award is based on the provider with the highest weighted satisfaction among main users across 11 categories measured.
Customer central
Kristen Turnbull, head of advice, wealth and super at CoreData, said the drivers of satisfaction in 2012 reflected both a strong focus on providing quality customer service and the desire from advisers for systems and processes that streamline their businesses.
“The customer is at the centre of what’s driving satisfaction among advisers with their life company in 2012, and rightly so. Advisers are looking for utility in the life company’s offer, as seen in the focus on competitiveness of pricing options and cover definitions across income protection, term life, trauma and TPD,” she said.
“The life companies with the highest adviser satisfaction this year are considered easy to do business with by their main users and demonstrated an ability to provide support to advisers around sales, industry changes and business development. “In an environment where risk specialists and financial planners generally are facing a myriad of regulatory changes and continued market volatility, advisers are looking to their life companies to bring greater efficiency to their practices.”
According to market research firm, Investment Trends, 93 per cent of financial planners surveyed in its 2012 Planner Risk Report say they advise on risk insurance – the highest level since the firm began measuring planner involvement eight years ago.
Number one and passionate about life
The result caps a good year for TAL and Japanese parent company Dai-ichi Life, with TAL’s revenue on a Japanese GAAP-reported basis rising 9 per cent to $1.195 billion for the six months to September 31, 2012 compared to the same period the year before. The business’ net profit after tax increased 8 per cent to $68 million for the period compared to the 2011 half-year result.
TAL managing director, Jim Minto, believes the underlying profit and growth figures are impressive given the continuing tough business climate.
“TAL continues to implement its strategy of developing a multi-channel distribution model to ensure we meet constantly changing customer and partner needs,” he said.
Commenting on the win, Brett Clark, chief executive of TAL retail life, said “winning this award is a testament to the efforts of staff who go out of their way to deliver outstanding products and services to our advisers and customers”.
“We congratulate the other finalists and thank our adviser partners who contributed to this award, and are as passionate about life as we are,” he said.
