Anand Thomas, MLC Life Insurance chief customer officer of bancassurance, digital and direct, told says the company’s decision to expand the distribution of its NAB Essential Life product was about giving customers the option to decide what’s appropriate for them.
“When you look at the trends that are happening all around the world, in terms of digitising and so forth, customers are becoming comfortable operating in that channel, and their expectations of wanting things being done in a simpler way is improving,” Mr Thomas told Risk Adviser.
“Some customers might need to go to a financial planner and get more holistic protection, but some customers … just want access to the security of having life protection in a quick and easy way.
“It’s all about enabling that distribution channel to provide customers with that choice.”
As for how direct life distribution will work alongside MLC’s financial advice network, Mr Thomas said the initial decision will come from the customer.
“The banker would ask the customer whether they have a need to have life insurance,” he said.
“If the customer says yes, then we provide options to the customer … would they like to make time to meet with a financial planner to go through a needs-based analysis and get a fully underwritten insurance product?”
Risk Adviser’s sister publication ifa reported yesterday that MLC said in a statement NAB Essential Life will be available online, over the phone and in NAB branches.
Customers will be able to purchase the cover through “an easy and speedy application process without the need to consult a financial adviser or planner”, MLC said.
This is actually not about customer choice. If you take our a life insurance through NAB essential as a 45 year old non smoker for $500,000 you will pay $85.85 per month. It will be easy to get because its basic underwriting with a high number of policy exclusions for claiming.
If you took the same policy out with MLC retail through a risk adviser getting upfront commission the same customer would pay $39.43 per month (LESS THAN HALF OF THE COST!!) The case would be properly underwritten and would not have the same exclusions when claiming. In addition the customer would have the chance to be advised on other important insurances (e.g. IP, Trauma or TPD)
Of course any customer in their right mind would choose the risk adviser.
So why is this not about customer choice?
Simple, because thanks to the LIF the risk adviser can no longer afford to give this advice for free in the future.
So this is not about customer choice, its about the FSC and insurance companies blatant greed and abuse via the LIF to stitch up both customers and advisers.
It is about the FSC members finding a way to charge more and pay less claims in the future.
I find the below quote interesting given that when the LIF package was first introduced there were going to be steps taken to make the advice process more efficient? Licensees, ASIC and insurers were never going to make the provision of advice more efficient and less complex despite this being the carrot that went with the stick of reduced commissions.
“When you look at the trends that are happening all around the world, in terms of digitising and so forth, customers are becoming comfortable operating in that channel, and their expectations of wanting things being done in a simpler way is improving,” Mr Thomas told Risk Adviser.
Another bank profit scheme – no thoughts of the client if they have a claim.
When will the AFA & FPA support the work of financial advisors – or are they on the bank payroll?