Almost half of all financial planners have cut ties with at least one life insurer in the last year and almost 30 per cent intend to follow suit.
The 2017 annual Planner Risk report by Investment Trends shows that 47 per cent of planners have changed life insurers last financial year, and more than a quarter claimed they would like to establish a new insurer within the coming year.
Senior analyst King Loong Choi said, ‘Insurers need to provide support from the back end, through seamless underwriting and online applications, all the way to the front end, by assisting planner with client engagement and education.’
‘Insurers that cultivate their planner relationships and maintain high satisfaction levels will benefit from lower attrition levels.’
Given the changing nature of life insurance advice, this is very important as planners prepare their businesses for the Life Insurance Framework (LIF) impact.
The research has shown that planners are becoming more dependent on hybrid commission models as upfront commissions are faded out. Advisers are developing their business models to be in line with regulatory change, with many challenges being met, including paperwork, administration, and compliance.
Insurance and technology providers are becoming increasingly vital in helping planners expand their life insurance business. The survey found that most insurers are meeting the challenge, with 90 per cent of planners rating their primary life insurers and good or very good.