Insurance: the easy sell

So the stats that reveal we’re one of the most underinsured nations on the planet are as alarming as they are an opportunity.

And there’s an old saying that goes, ‘insurance is sold not bought’. If Australia’s low rates of cover are to be believed, then it’s clear customers aren’t actively seeking it. Arguably, the problem is you never see the value of insurance until you need it or it gets paid out.

Herein lies an enormous opportunity for brokers to diversify their business into one of the easier cross-sells – insurance; and arguably the easiest of all, home and landlord insurance.

The message is clear to brokers: it’s not about ‘selling’ premiums; it’s all about helping a client, offering them protection, seamlessly tailoring insurance offerings into any successful home loan application – be they as simple as home insurance, or more challenging options like life insurance and income protection.

So who’s doing the insurance side of the business well?

To find out, The Adviser, in conjunction with Allianz Insurance, polled 474 brokers to see who’s doing it, why they are doing it, and what have been the successes and the tribulations.

And the results are in…

It has taken a while but it appears all the industry noise, the work of the aggregators, even the insurers themselves, is starting to pay off. If there was exciting news to be gleaned from The Adviser Insurance Survey it had to be that an increasing number of brokers are now reaping the dividends from an insurance offering, be it general, life or both.

And what’s not to love – additional revenues, arguably the easiest of the cross-sells, stickier clients, a more valuable book, all without any sign-up fees or expense on the part of the broker.

As Allianz Insurance’s national manager growth markets, Dan Tully, sees it, the broker takes care of the home loan, so a conversation about home insurance should be a given. Mr Tully reinforces the “if you don’t do it someone else will” mantra and adds, “If a broker is looking to diversify their business, home insurance is the easiest place to start.”

Mortgage Choice’s CEO, Michael Russell, concedes some brokers simply refuse to diversify their business – be it insurance or otherwise – for fear of being perceived as a salesperson.

“Yes, some worry it may interrupt their credit process and impact their ability to convert the enquiry,” he says, “but this is the wrong attitude to have.

We encourage our brokers to discuss insurance at various stages throughout the credit process so that their clients understand the importance of reviewing their risks and it is not a surprise conversation at the end of the process.”

An easy sell

One aggregator that has worked hard with its brokers on general insurance offering is Vow Financial, and company CEO Tim Brown agrees that it’s both an easy and sticky sell.

“It has an amazing renewal rate and it’s a bit ‘set and forget’,” he says. “Over time the income from several policies can add up; this adds another income stream that is great for cash flow and adds to the overall value of your business.”

Interestingly, general insurance (home, landlord and car) is regarded as a far easier sell than the more complex policies (life and income). Yet, The Adviser Insurance Survey showed 54.6 per cent of brokers offered life and only 42.6 per cent offered general.

And Mr Tully agrees ‘life’ can be trickier: “Most people have super and super funds have ‘life’ bundled into it, meaning the broker has to work a lot harder to make it less a sell and more a need.”

Getting started

This talk of broker diversification is all well and good, but how do you actually get started? Again, general insurance is the easiest place to start.

In fact, Mr Tully says the mortgage broker channel is the fastest growing sector of the Allianz business and he puts that down to a concerted education campaign by the aggregators – namely Vow, Mortgage Choice and AFG – over the past three or so years.

The easiest way into insurance, says Mr Tully, is for a broker to contact their aggregator. “Good aggregators will have done all the hard yards to find out who the best providers are,” he says, “so it’s a simple matter of linking up with your BDM to work out how to get on board.”