Here is a link to the latest Quotemonster newsletter 'Supercharge your sales process'. It describes how to create all the cool components of a great risk report now available from Quality Product Research. To receive it directly you must have a Quotemonster account with a valid email address.
Using Quotemonster you can develop some great information for your insurance report. Each part of our insurance data is designed to help you connect to the customer somehow. For example - price comparison, because customers like to see you quote the market. They want to see that you have checked out the policy differences so they don’t have to. If you tell them they have 25% risk that one of them will suffer a critical illness that helps them decide whether or not to buy.
You might not think the underwriting requirements report helps you sell, but it does. Some people love surprises, but discovering that you need to have blood drawn is unlikely to be a favourite. Some people just don’t like needles, but feel embarrassed, and won’t tell you. There’s a customer that will leave wanting the product, but may not buy, and may not even tell you why. Of course, most people are perfectly happy with whatever the process is, so long as they aren’t sprung with a whole series of extra demands which take up their valuable time.
So preparing the underwriting report is about helping the client understand what needs to happen to put the cover in place. Sometimes they may make choices to reduce the scope of tests required, and that’s okay, most of the time they will be happy with what you recommend and glad to know that you are going to take care of the whole process for them, and glad that you have shown them what the process is going to require.
On Quotemonster, to find underwriting requirements you need to prepare a quote just like usual. This is vital as underwriting requirements vary according to client data, the policies and sums insured selected. Set up the client, or open an existing client, choose your benefits, and then hit next to move to the price comparison chart.
When you are at the comparison page you will notice a row of tabs. The first lets you download brochures and policy documents. The price comparison you will be familiar with. The research tab shows a comparison of up to fourteen products at once. Next is head to head. Then you see the underwriting tab.
If you know the client’s body mass index (BMI) then you can enter it here. If you don’t, then leave it with the default (which is set to the upper end of ‘normal’). If you want to know how to calculate BMI click on the button next to the field. It’s straightforward.
When you have entered these details click this button to get your report. You can view this on screen and later you can add it to your Quotemonster report. The requirements are split into groups. For example, there is a group for blood tests, another for a physical exam, and a different group again for a fasting test. Each of these represents an ‘activity’ for the client, and should therefore be mentioned in your implementation plan. Also, it is worth noting that the requirements can vary considerably for high sums insured. This is especially common for cases involving business insurance and higher income protection amounts.
Insurer commission records are a poor guide to actual financial adviser behaviour - but they remain the best place to start. The FMA is following up its research based on lapse rates and new business records with requests directly to advisers with higher lapse rates. This is a valuable exercise and it is already exposing some interesting findings. Take these two:
The fact that a policy lapsed while the computer records at a life company showed a given person as the servicing adviser does not necessarily mean that adviser gave an advice on termination. That adviser may not have been receiving any commission, may never have received the initial commission, and may not in fact own the right to communicate with that client. They may not even own the client records. Although many will, these situations do occur, and cast a sharp light on the structure of the current Financial Advisers Act. The Act makes the individual adviser responsible for their advice, and yet a company may have so much control over the process - and the remuneration for the business - and yet have little or no responsibility for the advice. Ideally this anomaly will be addressed in the drafting work for the new law and subsequent regulations.
On the other hand there will be some advisers that may find the request for information hard to answer. Poor records will be exposed. Although as RFAs they do not have an explicit record keeping responsibility it will be interesting to see how the FMA and RFAs approach the question of a lack of records. In a no-advice sales context records can be thin, but in a situation where a person was supposed to be giving advice it does seem a failure of the design of the law that there is no requirement to keep records. The new law appears set to address this gap.
Fixing those issues looks like a worthwhile task.
Gisborne man Teira Pokai has had Life Insurance for 15 years - over that period he has had a 670% increase in premiums going from $22.70 a month to $175.06.
Of course he has. He has also had an increase in sum insured, which has grown by about 40%. So his rate increase has been a lot less. But still, this is a simple fact of a rate-for-age product compared to a situation where most consumer goods get cheaper or better value over time. This is the bitter consumer harvest of resentment that is being reaped now as a result of two or three decades of selling rate-for-age product. The consumerist argument was 'buy term and invest the rest' the result of the actual behavioural experiment has been... they only managed the first part.
Click here to read his story.
With Quality Product Research we have lots of great information to put in the insurance report – more than any other source available in New Zealand – it includes quotes, market research, (even on bank and direct products), a head-to-head comparison, underwriting requirements, client risks, and needs analysis.
But the client wants to see a recommendation. All that data might be reassuring reference material, but what about a nice short document which highlights the essential choice? A great way to do that is with the one page “Head to Head” report. A lot of advisers that use our system have a recommendation letter and use the head-to-head report as the main focus.
Clients are typically looking for help making a decision. That means highlighting the main points of difference between the best options for them. Bringing the decision down to a ‘top two’ and choosing between them is a great way to get that clarity. To find head to head you need to prepare a quote just like usual. Set up the client, or open an existing client, choose your benefits, and then hit next to move to the price comparison chart.
When you are at the comparison page you will notice a row of tabs. The first lets you download brochures and policy documents. The price comparison you will be familiar with. The research tab shows a comparison of up to fourteen products at once. Next is head to head, but we cannot click on this yet. To make this report work you need to go back to the research tab and tick two products to show on the head to head tab. You know you’re ready when the tab changes colour. If you cannot see the two products you want in the research table you may need to click on the “companies” selection menu and tick the companies you want to see research for.
Remember to click save and close when you have chosen the right companies. Now tick the two companies you want to see. Now you can click on the head-to-head tab. The Top chart shows the features with the most significant differences. Check the figures in brackets to see what the score difference is.
Underneath that there is a table which lists features that are not in one policy but not in the other. These might be significant for the client, and are important for full disclosure, but they are each worth less than 1% of the total score. If they are worth more then they will appear in the chart at the top of the report as being significant differences.
Typically the report fits on just one page. With some products where there are many items and many differences it may run onto a second page. But the great advantage of this picture is that it quickly, visually, allows you to focus on the few meaningful differences between policies. Not a sea of words or numbers in a big report.
But of course, you probably still need context. Your recommendation should connect the features of the plan to specific requirements you and your client uncovered in your earlier discussions. The next part in this series covers other parts of the insurance report which can help you do that.
It is relatively rare to hear of the FMA taking action against RFAs. Obviously RFAs now need to contemplate the likelihood of a revised Financial Advisers Act next year and a two or three year implementation timetable. More current activity arising from the FMA's trawl of lapse and sales data is being felt right now. But this release describes action taken against an RFA recently. If you read the full release you might think the adviser was quite fortunate the matter ended as it did. Link.
Power users of Quotemonster don’t just compare prices – they build the best personalised insurance report possible by adding in a market research comparison which can include major bank and direct products, add a head-to-head comparison, underwriting requirements, client risk report, and a complete needs analysis.
Writing a compliant recommendation is easy with this information to hand. But you want to ensure you protect your customer’s privacy while using these tools. We want that too. We have a strong privacy commitment in our privacy statement which you can find by looking at the link on the bottom of the page before you log in at Quotemonster.co.nz. Also, you can be confident that when we look at the aggregate data on our system – to do cool things like work out average sums insured, or work out best demographic targets for advisers – we always remove personally identifying data and work with aggregated data. Nothing could identify your client.
That’s us what about you?
A commonly thought-of risk is unattended files or computers in your office, you do need to address those. But more likely risk is that you may not be talking to your client about privacy issues correctly.
Our lawyers tell us that you need to have your own privacy statement in your process. It should explain that you can use their information in third-party systems (not just ours, but even insurer’s quote and application systems). You need to write a good one for your own process of handling information. If you need help writing one, please drop us a line in the office and we can refer you to a compliance guru who can help. But if you’re still worried, maybe if you haven’t got your privacy statement organised, there’s one simple approach you can use to get started right now: Just put in your clients initials instead of full name. Then then it’s really hard for anyone – even someone who might look at your computer if you were called away suddenly – to connect these personal details to a specific client that they might know.
We want you to get sorted on privacy so you can use the full range of information and research available on Quotemonster to help you deliver an outstanding personalised advice report for every client you meet. Including all the bits that are customised based on your client’s age, gender, occupation class, and information in the needs analysis.
PAA are hosting their Professional Development Day Roadshows in September and are visiting 11 locations around the country. Click here for more details and to register.
You now have the ability to add your company logo to the front page of Quotemonster reports. To upload your logo login to Quotemonster and click on 'Settings' and then the 'User Settings' tab. You will then be able to upload your logo as shown in the picture below.
Fidelity Life pricing changes effective 8 August are now live on Quotemonster.
They were all reductions including:
- Trauma, Accelerated and Standalone - reduced by 10%
- Income Protection (Indemnity and Agreed Value) - reduced by 10%
- Mortgage Protection - reduced by 10%
- Waiver of Premium - reduced by 10%
Please note Key Person cover was reduced by 30% but is not quoted on Quotemonster. There was no change to Level Term products, Trauma Multi and Redundancy Cover.
A new version of the Premium Comparison database will be available later this week for institutional subscribers.
We know that these reductions apply to new business rates but do not yet know whether they apply to in-force rates applicable from the first anniversary.