Protecting clients with terminal illnesses

What prompted the decision to establish the Special Risk Managers business?

Twelve years ago, my business partner – who has since retired – and I were both sole practitioners through Associated Planners, which evolved into Genesys Wealth Advisers and we used to get regular calls from advisers asking for help. One day I jokingly said that we should make a business out of this – which was a light bulb moment – and so we did.

We have been around for a while and – even if I say so myself – we are good at what we do and we negotiated an exclusive arrangement with a reinsurance company, which was unique in Australia, and then naturally we negotiated arrangements with retail insurers who would issue the product. And then off we went.

In that business, we are probably Australia’s only specialists in impaired life. So people with a history of chronic illness who cannot get cover have a greater prospect of obtaining cover through us and in fact, the vast majority of our business comes from other advisers who refer their clients to us when they hit a brick wall. So while we do a reasonably substantial amount of business with standard lives, we also do plenty outside the norm.

How did you go about building relationships with insurers so that you could provide cover to these clients?

It started out with a few pre-existing relationships. It sort of came to the point of proving ourselves and we did that with a significant amount of executives at reinsurers and retail insurers. A fair few of the cases that we have placed would be on terms way above the normal authority of even a chief underwriter. So, they would have to be actuarially calculated for us, which is a cost exercise. It is only because of the knowledge that these insurers and reinsurers have of our ability to convert the business that they have bothered to do it in the first place.

Are there certain illnesses that are more challenging than others to get cover for?

There are certain cases that not even we can help with, and particularly in the current climate with the reinsurers having taken a hit over the past couple of years in Australia, things have tightened up a bit. But clients with cancer, and depending on the type of cancer, are particularly hard and sometimes impossible to place cover for.

But in general, we have an extremely high conversion rate and that is part of our success because while we do not have formal training as underwriters I would suggest that our knowledge would be equal to a number of senior underwriters.

How much understanding of the products that are available do you have to have for you to be able to say I know I can help a particular client with a certain illness?

We have product knowledge, but when it comes to the chronic health issue, quite honestly it is not a product-related matter because of the fact that these people literally cannot get cover from traditional sources. So pretty much anything that we can do for them is better than what they are able to do for themselves. So, it doesn’t come down to the quality or the features of the product. Hypothetically, if they are looking for income protection, whatever income protection we can provide for them is better than the nothing they have at the moment. But we would give a client the best available product we can.

Are these clients at all surprised that there is an option there for them?

Absolutely – a lot of advisers that have been around for a while don’t bother calling us because they believe if they can’t place it, nobody can. But those that do come to us are continually surprised by what we have been able to achieve.

Is there one particular case of someone you have helped that you can share?

Certainly – we could arguably be the only people in the world that have been able to place life cover on someone who has received a terminal illness benefit.

The client received a terminal illness benefit following his diagnosis and four years later he was still alive and was looking for insurance. He still had his illness but he was no longer considered to be terminal, and we got him cover at a loading equivalent to – and people may be surprised by this – 4,000 per cent.