Planners are focusing more on life insurance and expect this to continue over the short term

Recep Peker

The proportion of planners advising on risk has remained steady at 90% over the last 12 months, and those who do are sourcing a greater proportion of their practice revenue from providing risk advice (29%, up from 27% in 2013). Looking forward, planners expect this trend to continue with risk advice accounting for 31% of their practice revenue by 2017.

“Risk continues to be a key component of many planners’ businesses,” said Investment Trends Senior Analyst Recep Peker.  “Providers can help facilitate planners’ intention to grow their risk business by addressing some of planners’ key challenges, chiefly high premiums, administration issues and inefficient processes.”

Planners are expanding the range of insurers they use, but switching remains high

After four years of planners consolidating the number of insurers they use, planners have started to expand the number of insurers they use. The typical planner now uses 3.7 insurers each, up from 3.4 in 2013.

However, levels of insurer switching remains high with 40% of planners saying they stopped using at least one insurer in the last 12 months, up from 35% last year.

“Insurer relationships are in a state of flux,” said Peker. “Planners are aggressively expanding the number of insurers they use, while cutting those who aren’t exceptional. There are great opportunities and risks for insurers to either benefit or lose out from this switching.”

Despite insurer relationships changing rapidly over the last 12 months, it is still crucial to be a planner’s most-used insurance provider. Planners currently write 59% of premiums through their most-used insurance provider.

BT Life, OnePath and AIA Australia posted strong gains in terms of primary market share. The top five insurance providers by number of primary planner relationships are now:

1. OnePath
2. AMP
3. AIA Australia
4. BT Life
5. TAL

“Whilst planners are using a wider range of insurers, the market is also becoming more concentrated,” said Peker. “The top five insurance providers now account for 66% of primary planner relationships, up from 62% last year.”

Zurich and AIA Australia has the highest satisfaction amongst its users

“Satisfaction is crucial in the insurance space, as business is not very sticky and planners can easily stop writing new business with an insurance provider,” said Peker. “That’s why there is a very strong relationship between satisfaction and switching behaviour.”

Planners’ overall satisfaction with their most-used insurance provider remained steady at a high level. The top three insurance providers by overall planner satisfaction in 2014 are:

1. Zurich
2. AIA Australia
3. Asteron Life

Underwriting is a key area in which insurers can differentiate their offerings

Following the tightening of underwriting standards over the last year, we’re seeing the average number of days planners say it takes providers to process underwriting submissions increase from last year’s levels. This has resulted in planners’ satisfaction with underwriting falling slightly at an industry level over the last 12 months.

“The underwriting process is the strongest driver of overall satisfaction with insurers,” said Peker. “So, any falls in satisfaction with the underwriting process is noteworthy.”

“Underwriting is very important for both acquisition and retention, and will be a key battleground for insurance providers over the next year,” said Peker.

45% of planners said insurance providers should focus on improving underwriting speeds to help them with their advice on risk.

Users of XPLAN’s risk modules have the highest levels of overall satisfaction

89% of planners who advise on risk use risk software. XPLAN continues to dominate the risk software space with over half (53%) of planners using XPLAN’s risk modules as their most-used risk software. This is followed by Rubik/COIN (18%) and Midwinter (8%).

At an industry level, planners’ satisfaction with their most-used risk software remained steady at the eleven-year average.

Among risk software providers, XPLAN achieved the highest average overall satisfaction rating from its users and ranked highest across all nine of the other service elements measured.

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New Rubik iPad App released

Rubik Financial Limited, the ASX-listed global provider of financial technology and software, today announced the launch of its iPad app, COIN Rapid, which allows financial planners to access client details and portfolio information on-the-road directly from COIN Software.

Rubik Managing Director Wealth, Wayne Wilson, said COIN Rapid had been developed in response to market demand.

“The iPad app is fully integrated with COIN Software and allows users to access their clients’ key data and portfolio information,” Mr Wilson said.

“COIN Rapid delivers the key client information that is available on COIN Software direct to the users’ iPad, allowing users to access client information at any time, and any place.

“Along with the functionality to search through the client base and to quickly view basic information for each client, the Client Dashboard functionality allows an in-depth view of client information.

“Drilling down into each area allows users to view their clients’ essential data, such as key details, key relationships, insurance arrangements, goals and objectives and estate planning information,” Mr Wilson said.

Key features of COIN Rapid include:

• Real time access to key client details and portfolio information in COIN software
• The functionality to update the personal details of existing clients
• The ability to create new client groups, and
• The capability to view and create file notes for clients

COIN Rapid will be made available to all Rubik institutional clients that have COIN version 4.1 or later. It will be available for the ex-Visor clients when they upgrade to COIN 4.2.

The launch of COIN Rapid follows the announcement earlier this month that Rubik had completed its acquisition of Provisio Technologies. The acquisition of Provisio expands on Rubik’s current advice offerings, COIN and Visor Desktop financial planning software, and reinforces its important role in the growing wealth market.

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