Advisers and retail insurers could still be the big losers beyond 2014 in capturing the hearts, minds and insurance policies of Australians unless they work together to get back to the basics of what customers really want from an insurance solution.
The reality is that retail sales growth via advisers was in 2013 the lowest in recent memory, whilst retail lapses continued to trend upwards (15%). Some stand out insurers did however buck this trend with declining lapse experiences.
The reality is that the reinsurer claims experience through the group channel has placed some retail insurers on the cusp of significant price increases, a result of prior pricing philosophies that perhaps did not adequately compensate for the risks being insured.
The reality is that faced with the resultant "bill shock" the value, service, and trust equation of advice and advisers is being questioned and a growing chorus of consumers have turned to the direct channel for a "value for money" solution.
The reality is that some non underwritten direct channels do not offer value for money, as they do not offer claims certainty.
The reality is that there is a growing disconnect between what is being delivered by insurers to advisers to distribute and what customers really want.
Customers and advisers want 'sustainable pricing', they want quality insurance products for the right price, reflective of a properly assessed risk and claims certainty. They want less complexity in the process of applying for and maintaining a policy.
2014 and beyond will be a success for those insurers and advisers who recognise and partner towards what customers really want : the right cover for the right price, and certainty that the right money goes to the right people when they need it the most.
It's a simple proposition that hasn't and shouldn't be changed.
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