What pushed your buttons this year?
In the first of a series looking at the key issues in 2012 Philip Macalister gives his take on the big issues in the life insurance sector - and offers some thoughts on next year.
Monday, December 24th 2012, 6:00AM
The biggest insurance story of the year is a tough one. Indeed it’s hard to single out one, but if I had to it would be the success of Partners Life and its impact on the life insurance industry.
Here at Good Returns we run stats on business written and Partners has been a truly amazing story moving into second place for new business written, behind heavy weight Sovereign.
The enthusiasm of many to promote the policies has been huge. I have been blown away with the number of advisers who have proactively sold Partners Life policies. Indeed I even had one pitch made to me in my local café.
Although unreported this year, Partners Life’s “Achievers’ Conference” in Las Vegas has to be one of the biggest (and most expensive ever). We understand around 270 people attended, about 200 more than the company originally estimated at launch.
They all flew Premium Economy, were treated to many shows and trips and (from the stories which have filtered through to us) had a bloody good time.
Partners Life managing director Naomi Ballantyne told me that the number of attendees is “a simple reflection of the unbelievable growth we have experienced and continue to experience to date.”
“The nice thing about incentives such as this one is that they drive advisers to write more than they otherwise might which is good for them from an income point of view, good for us in terms of production and obviously good for the clients they have insured.”
What other stories have been big and influential this year and in the future?
One that we are watching closely is the growth of direct, web-based sales of life insurance. The big players like Pinnacle, Life Direct and Cigna have clearly invested a lot of money into promoting sales through this channel.
Many advisers seem to see this as a threat to their business. However, I don’t see it this way. The people who are buying their life insurance this way are, in all likelihood, consumers who have no or little interest in seeing and adviser.
At least they are starting to get some cover.
Whether it is appropriate cover is another question. So too are the questions about some of the products sold in these channels. You just have to look at the discussion on Good Returns around Cigna’s policy to see the issues here.
The other area which is worrisome is what happens at claim time. One of the things I love is hearing the stories from advisers and life companies about how good it is to help clients at claim time.
For me, I would always recommend an adviser for life insurance. If there was an exception it would be for a simple product like term life.
My predictions on issues to watch in 2013?
The make up of providers. Will Fidelity really buy TOWER’s life business? Can Partners keep up its growth? Can AMP turn around its fortunes?
The debate on under-insurance. This is something which I struggle to see the public connecting with. Standing up and bleating about it isn’t going to fix the problem. It’s up to providers and advisers to work out how to sell more life insurance. Direct distribution is one part of the answer.
A topic which is likely to come into sharper relief next year is the role of dealer groups. The decision by the likes of OnePath and TOWER to remove over-rides has had a big impact this year. How dealer groups evolve and their relationship with life companies is, I predict, a hot topic.
The status of RFAs and whether the bar will be lifted for these people. That though is the topic of another post.
One thing that may come under the spotlight is all these overseas trips. I’m not going to express a view here (yet). After 20-something years reporting on this industry I have been invited to all sorts of things. But I have never had an invite to an “offshore conference”. Maybe they should be abolished (unless I get an invite next year!)
The one thing I haven't mentioned is commissions. There will be lots of talk but little will change.
Do you agree or do you think other issues have been bigger? Let us know in the comments section below.
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