The director of Coremotion Financial Services, Michael Ord, discusses how he became a risk adviser and why he decided to specialise in providing cover for those in the mining industry.
How did you come to specialise in risk advice?
I had worked as a holistic adviser but realised risk advice was a niche skill set that required a dedication and commitment to gain more specialist knowledge, which I continue to learn, and it personally interested me. I had worked in an area previously that focused on contracts, so there was some synergy between insurance policies and that.
You have a niche client base with those that work in the mining industry – how did you come to working with this client base?
Honestly, it was a targeted decision to have a niche market that I had an inside knowledge of. I had a headstart, as I worked in mining industry in the past, so I had an inside understanding of the customer’s needs. I live in a regional town of less than 2,000 people, so I wanted to build a client base that would also be able to work with this. As the last mining boom took off, I had more and more miners seeking advice on cover. Many insurers didn’t really understand what their job roles entailed back then, so I saw it as my job to help get clients the best outcomes by being able to explain exactly what the client was doing while at work.
What do you need to take into consideration when trying to provide cover for your clients?
Their work environment is key, as is what they are really doing in their role, when on site. For example, insuring a mine manager who is going to run a mine in Mongolia is challenging. Understanding and anticipating what insurer might be interested and what information they will need to help come to a decision is paramount.
What challenges do you face when working with this client base?
The boom and bust nature of mining is a challenge. Mining is an industry people are drawn to, chasing higher wages, but they don’t necessarily last. Working with clients that face unique circumstances due to locations, and different working hours requires innovation and flexibility, which I deal with via the use technology. I travel a lot away from home. I work outside a normal office environment and at odd hours. A big city planner who came on a road trip with me once described my practice as "working on a big rock on the side of a mountain”. Movement of labour between construction, mining and transport means understanding these markets is crucial, mine closures, takeovers are such examples. I once watched an adviser come unstuck who had jumped into this space during the boom. They insured a bunch of contractors on one mine site, to have them all retrenched six months later, new to the business, clawbacks nearly wiped them out.
Alternatively, what opportunities has this client base provided you?
From a business perspective, word of mouth has been great, miners are loyal clients, especially after you have helped them though a claim. It is quite a small industry, a tight network. The income miners have is above the norm, so that is an opportunity. What I love is that I meet some unique characters I would not have otherwise had to chance to meet. The chance to see vast parts of Australia you might not otherwise see is in itself an opportunity.
With the upcoming regulatory changes, will you make any changes to your target market?
We will have to consider the length of time someone has been in mining or if they are a contractor, before insuring them, or spreading some of the risk by charging an additional set-up fee. The harsh realities of being away from families, longer working days and the physicality of some these workplaces naturally sees a higher staff turnover in mining.
What do you think advisers should look at doing in their business to better manage the upcoming reforms?
Make your changes before the reforms happen. Don’t use insurers, that don’t support you, cut them lose, I hope that isn’t too blunt. Get the support you require from your dealer group. Make better use of technology, to manage your time. Outsource, cut costs, and consider diversifying, if you have to with your existing client base. Personally we have always had what I call the 'clawback fund', based on our own experience of 'lapse rates' based on a percentage. It can either be your bonus, or your backup for a rainy day.
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