Reviews key to client retention and satisfaction

For clients, this is one of the key benefits of having an adviser – someone who can understand their personal circumstances and goals and ensure their insurances are suitable to meet their current and future needs.

For advisers, it should be a core part of your value proposition and is fundamental to providing quality advice, retaining clients and gaining referrals.

It also protects your clients from the temptation of reviewing their own insurance through a direct channel and being seduced by what on the surface may appear a cheaper, easier option, but which may not provide the sort of cover they actually need.

There are many ways of staying in touch with clients and every adviser will have their own ways of doing this eg. quarterly emails, birthday cards, newsletters, seminar invitations, movie nights or the old-fashioned way of calling them on the phone.

The important thing is that these processes become an integral part of your business and that you communicate to your clients the need to formally review their circumstances and insurance, usually annually. They should also be aware of the need to inform you of any major changes in their personal or family circumstances, outside of the annual review.

It's important to establish these client expectations of your relationship when you first advise them and regularly stay in touch so they really do see you as a trusted adviser through life.

So, having set the expectation, how should you go about a formal review and what issues should this cover?

For business clients it is important to understand how the business is travelling, any major changes and
future growth plans. This includes:

• Any change to their business structure or ownership. This could affect who should be insured and who should be the policy owner.
• Personal guarantees could affect the amount of cover required.
• Current or planned new business loans could affect the amount of cover required.
• Leasing of new equipment or premises could affect the business expenses cover needed.
• Employment of new people who are crucial to the business operation could impact the key person cover required.
• Any change to their family situation could impact both their business and personal insurance.

For personal clients you need to understand any changes in their life situation and plans, financial circumstances and commitments. This includes:

• Family changes. More insurance may be required if there is a new child or less cover is required if a child is no longer dependent. This may be an opportunity to talk to the child about their insurance needs. If there has been a separation or divorce, or a new relationship, it is particularly important to review the lives insured and policy owners.
• Changes to personal or home loans. Are they adequately covered for their current financial commitments?
• Income and employment changes may prompt a review of their existing income protection to ensure it is adequate. They may be eligible for a better occupation risk rating, for example if someone moves from a physical job to an office job.
• Health changes which could affect their future insurability. Have they, or are they planning to, cease smoking? There may be an opportunity to decrease premiums if they have ceased smoking for 12 months.
• Cost of insurance. There may be an opportunity to change from a stepped to a level premium basis, to safeguard long-term affordability. There are now insurance funding options as well as partial roll-over, split benefits, or an increase in waiting periods that may be appropriate.
• Current loadings and exclusions to the policy. There may be an opportunity to remove a loading or exclusion to the policy.

This is not an exhaustive list of issues that need to be covered in a client insurance review and different advisers will have their own way of going about it. However, the important thing is that it is formalised as part of your ongoing practice management.

A review should not always lead to an increase in insurance. In many cases, a good adviser can identify when cover is no longer required or the existing cover can be decreased.

What it will do is strengthen your relationship with your client, show that you are genuinely interested in their welfare and you will be the first one they turn to for insurance advice. This is the way to build great long-term relationships and your business.

David Spiteri has over 25 years’ experience in the risk insurance industry, having worked for over 10 of those years as a risk adviser himself. David has firsthand experience in the areas of developing new business, claims management, and underwriting of insurance applications. More recently, as national risk manager for Centrepoint Alliance, David has been up skilling and mentoring risk advisers in effectively writing risk insurance and showing them how to leverage their professional relationships to uncover client protection needs.