Segmentation key to better client service

AIA Australia commissioned the Beddoes Institute to investigate what consumers want from their advisers, and how advisers and insurers might deliver more value to their clients.

The resulting white paper, The Advice Challenge, surveyed just under 450 advice clients and reported that when it comes to needs, insurance clients can be grouped into distinct segments. When it comes to risk advice, clients commonly fell into three categories – ‘value seekers’, ‘personalised advice seekers’ and ‘purists’.

The biggest two of these groups were value seekers (59 per cent of risk advice clients), for whom value for money was their top consideration when receiving insurance advice, and personalised advice seekers (27 per cent), who were looking for advice specifically tailored to their needs. While the personalised advice seekers were generally a satisfied group, with 91 per cent reporting they received tailored advice, value seekers were less pleased, with only 62 per cent reporting they believed they were getting value for money from the insurance their adviser had selected for them.

The numbers indicate that while many advisers are doing a good job serving many client needs, they can be doing more to address the specific needs of each client segment. That is, that advisers should focus on identifying these segment groups within their own client base and tailoring the service experience accordingly, rather than expending resources delivering services that are not as valued by clients and missing an opportunity to deliver on what matters most.

From the conversations we as insurers have in the market, it is plain that advisers are aware of the value of segmentation. One of the common pieces of feedback received when we were developing our Client Development Manager (CDM) model to provide advisers with practice management support, was that they wanted help in segmenting their client base to come up with targeted offers. So this growing trend toward specialisation is certainly there and the more the industry recognises that, the more valuable the service that CDMs provide to advisers will be.

The research also looked at what we as insurers can do to help adviser clients have a better experience. Clients nominated management of claims as the area where insurers can add the most value, and a majority (75 per cent) also valued being able to reduce their premiums by participating in health and wellness programs. These reflect the two primary focuses of our business at present – achieving claims excellence by supporting claimants through the process and helping them to return to the workplace in some form if possible; and putting dynamic underwriting into practice through our Vitality program that rewards clients for improving their health.

In an environment where consumer perceptions around the nature of advice are changing rapidly, it’s important that insurers and advisers work together to develop a model that addresses consumer needs and adds real value to the client experience. This is important to everyone’s best interests – AFA research suggests that those who seek advice have better levels of insurance coverage, so advisers are directly responsible for improving Australia’s chronic underinsurance problem.

Neither insurers nor advisers should lose sight of the role that sound and quality advice plays in protecting Australians’ livelihoods. To that end, we hope The Advice Challenge will contribute to some insightful discussions around how to improve and build on the adviser-client relationship.

Pina Sciarrone is the chief retail insurance officer at AIA Australia