Over the past month through a series of forums across the major capital cities, AIA Australia has been engaging directly with advisers to hear what they are looking for from their life insurance partner in response to the Life Insurance Framework (LIF). The purpose of the forums was to meet with our advice partners across the country face to face, to have a discussion around how we got to where we are in terms of the changes, what plans we have in place, but most importantly what our advice partners were looking for in terms of support from their life insurance partners, and ideas they had with respect to product and service.
Discussion at the events has been open, constructive, positive and insightful, giving us a good understanding of the areas advisers need or are looking for support with. Some of the ideas raised include retention ideas, taking steps to streamline administrative processes, growth opportunities and continuing advocacy for the value of independent advice and of insurance in general.
Product structures
Much discussion centred on the types of product structures that might be effective, with many advisers expressing support for a loyalty-based premium discount for long-standing clients. Fixed-term premium products were also a popular idea, with some advisers expressing concern that traditional stepped-premium policies presented an affordability issue to older customers when their premiums began to increase.
One of the major issues concerning many advisers in the wake of the reforms is the high administrative cost of providing insurance. Some frustration was expressed at the lack of efficiency, particularly in the initial application process, and the ability to change client details on a policy. There was strong support for moving towards a system that was as “paperless” and online-based as possible — a key area of focus for AIA Australia in the coming months.
Value of independent financial advice
There was also a consensus that insurers and advisers must work better together at promoting the value of independent financial advice, and of life insurance in general. The industry currently pays out over $7 billion in claim payments per year that clients would not have received had they not taken out life insurance. Yet some advisers still reported experiencing difficulty in helping clients to understand that life insurance was an essential part of any wealth preservation strategy and that government initiatives like the pension and the NDIS were not going to be sufficient to cover their needs.
The forums have been a great opportunity for us to actively partner with advisers to help them build long-term relationships with their clients that encompass life, health and wealth protection. While we recognise that there is more work to do on this, having a partnership philosophy is the only way we as an industry can move forward to deal with the challenges we face.
We will now look to develop specific campaigns and initiatives for the coming year based on adviser feedback at the forums.
