How technology can help risk advisers

What role do you see technology playing in helping risk advisers following the recent reforms?

I think the main advantage of technology is it is going to make everyone’s job more efficient and more streamlined – because it will have to be – and more productive.

With the recent launch of Connection Engine, how can this help risk advisers with the proposed reforms?

Essentially, the driving force behind it was having worked as an adviser and with advisers – so with different practices around the country and with a lot of referral partners both within the banks, accountant and mortgage brokers – there are three key things that I can see Connection Engine helping with.

The first one is the best way people can come up for tracking referrals is basically through emails and spreadsheets and that just means that referral partners don’t get the communication back that they want on where their client is and what is going on.

The second thing is there really isn’t much in the way of tools that actually helps referral partners have conversations with their clients. There is a lot of collateral around insurance products and around solutions but not a lot around asking the right questions to help people understand why they need to see a professional. I am a massive advocate for professional advice over robo-advice, so my view is that robo-advice is really effective if people know what the problem is and know what they want to solve, but when it comes to insurance, people don’t know what they don’t know and so Connection Engine is trying to help on two fronts there. One is that it helps automates the process for the referral partner and also gives them types of exposure they need to the sorts of things they should be asking and should be talking about.

Lastly, Connection Engine can help with analytics. For any practitioner to thrive in this new environment, they are going to have to have a really good understanding of their business process and they are going to need to be as efficient as possible. So understanding how long it takes for a client to get from ‘go to woe’ is critical. Because if you make changes in your business you need to be able to know if there was an improvement or whether it actually cost you more time – you need to know what the outcome is. Now I know that from my time as an insurer, we could get some phenomenal data on that. We knew exactly how many cases were lodged, what the conversion rate was, what the completion rate was, we had everything and when we worked with advisers and dealer groups they had none of that data.

Do you see a lot more innovation occurring in the insurance sector to help advisers “thrive” within the new environment?

Definitely. I know that I am not alone, and there are lots of other people looking at doing this. I think the most important thing is that these ideas get shared rather than we try and keep them.

I think the insurers are definitely looking to invest because they obviously want to maintain product sales growth and sales and they know that doing that is going to require investment as well.

Outside of technology, how do you see yourself and your business managing with the Life Insurance Framework?

Because the three-year clawback is such a risk for such a long period of time, you would have to reserve cash and sit on a lot [greater] amounts of cash than most planning firms do. So I think we would be better charging an upfront fee, discounting the client’s commission as a result and then taking the ongoing trail because most insurers will let you do that. They will go, delete the upfront, keep the trail and get a 10 per cent discount. So that is what we are looking at. But it is easier for us because we are a full-service firm, we can cross-subsidise.

Where do you see the biggest challenges and opportunities in the risk insurance space?

I think the biggest challenge is productivity. I think we are used to being able to write one or two cases a week and that’s more than enough revenue to keep the business moving and paying salaries, and I think when up fronts change there is this three-year transition period and this challenge for new advisers that they will need to be significantly more productive to survive. The easy math is if you were writing upfront commissions and now moving to hybrid, you need to effectively double your new business intake in the short term to maintain the same income.

I think the biggest opportunity is that by improving productivity we are improving underinsurance. If we put in place smarter systems, better technology, more efficient advice processes, better tracking and analytics, ultimately we are going to help more people.