Any broker wanting to build a profitable, diversified business would be mad not to include insurance. It’s easy, a seamless fit with a home loan, and with a vast number of Australians underinsured, it makes for the perfect cross-sell
Brokers who do offer insurance say it’s arguably the easiest of the cross-sells – high uptake, little compliance, with the (better) insurers doing most of the work anyway.
Admittedly, the trails aren’t typically significant, but most brokers agree that insurance is as much an ethical thing to do as it is a financial one.
Not offering insurance? Here are five tips to get you started…
Teo Torrelli, owner and credit adviser at A-Lend, says he started offering insurance (namely loan and income protection) in 2009 following the introduction of the National Consumer Credit Protection Act (NCCP) rules.
“The new rules mean you can no longer pay lip service to ensuring your client’s assets are protected,” he says. “Insurance is the easiest of cross-sells.
You’ve got the client taking out a large loan, so it’s imperative as a trusted adviser you go that one step further and talk to them about insurance too.”
Forget the hard sell
Mr Torrelli says insurance need not be a hard sell; instead, include it in the conversation from the start of any loan application. That way, through the entire process the client is aware of the insurance aspect, aware of the costs, they can go away and think about it, and once the loan is approved there’s no surprises, he says.
Involve your aggregator
Most of the top aggregators would have an insurance offering and that’s the best place to start. But the advice here is to shop around, to find a company and a product that best suits your business.
“You want an insurer that is competitive and easy to deal with,” says Tim Brown, CEO of Vow Financial. “Often you have to try a couple of insurers to find one that has your level of customer service ethics.”
The advice from brokers is that insurance isn’t merely some add-on, but an intrinsic part of the home loan application.
“If the broker is knowledgeable about a product, it’s always going to be easier to sell,” says Tamara Virgo from Elders Esperance. Understand a customer’s needs and you can sell them virtually anything, she says.
“Home and contents is the easiest place to start. That said, people are now starting to place a real emphasis on themselves, their life, their income. They realise without those things those assets are at risk.”
Good for books, good for relationships
According to Mick McClure, managing director of Buyer’s Choice, people will drop insurance as soon as money gets tight. Thus, he argues, if you do offer insurance it’s imperative you keep in contact with your client.
Insurances (unlike mortgages) need to be assessed, reviewed, updated annually and brokers who do it successfully will have businesses that become “very, very valuable indeed,” Mr McClure says.
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