And as we also approach 1 July 2018, when the maximum commission that can be received is reduced to 60 per cent, there is no better time to demonstrate your value as a risk adviser to your clients.
In suggesting you regularly review your clients, this does not necessarily mean moving them from one product to another. It is merely getting back to basics and getting closer to your clients by asking the simple questions about their life situation.
Life circumstances can change quickly and only by conducting regular reviews are you in a position to ensure your clients are adequately covered now and into the future. For clients with business insurance, has there been any change in the following areas?
- Their business structure or ownership that could affect who should be insured and who should be the policy owner.
- Personal guarantees that could affect the amount of cover required.
- Current or planned new business loans could affect the amount of cover required.
- The 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 have an impact on the key person cover needed.
- Their family situation, which could affect both their business and personal insurance.
For clients with personal insurance cover, has there been any change in the following areas?
Personal and home loans taken out. They may have taken on additional major liabilities in upgrading their home or other geared investments.
- Addition of dependents is always a trigger to assess their long-term family cover.
- Income and employment. It may well be that they have changed their occupation rating, for example a tradesman may have moved into business management.
- Health changes that 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. If this is an issue there may be an opportunity to change from a stepped to a level premiums, 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.
- Binding nominations.
It is all about having adequate cover to ensure that the right money is paid to the right people at the right time.
The review process will not only cement your relationship with your clients but will create business opportunities.
In addition to this, do you measure and plan your touch points with your clients? Today, there are so many ways to keep in touch with your clients that do not require enormous amounts of time.
Some examples of possible touch points include:
- Social media
- Function invitations, eg movie nights
- Emailing a video clip of your messages
- Newsletters
- Text messages
- Good old-fashioned phone call
All life insurance companies have a tremendous amount of content to assist you and your business with maintaining effective client relationships.
You know your clients best and what sort of contact program will suit you and them. It can be as simple as staying in touch through an email, say on their birthday, to a formal face-to-face review process.
The main thing is that it should be an integral part of your business processes, not just something you do on a rainy day when business is quiet.
Even if nothing has changed, you have demonstrated your professionalism and your care for your clients. As we all know, the best referrals can come from your existing clients. They have family, friends, work associates, etc, and staying in touch with clients can be the best marketing investment you can make. 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.
I firmly believe that with a good review process and by continually staying in touch with your clients, you will not only have an effective retention strategy but lay strong foundations to grow your business.
David Spiteri is the national risk manager at Centrepoint Alliance
