Advice clients move to cover their assets
Advisers have seen a steep rise in insurance sales over the past year, as financial market woes spook clients into buying life risk protection and income protection.
Research being compiled by CoreData on insurance sales trends over the last 12 months has shown that nearly 48 per cent of advisers have seen an increase in insurance sales over other streams of income. Only 5 per cent of those surveyed said there had been a decrease in insurance sales. CoreData sampled more than 2,000 advice clients of risk providers for its research Tim Browne, the general manager of Financial Wisdom, said the company’s new insurance premiums have risen by 25 per cent over the past 12 months as investors try to insure themselves against further financial losses. The current economic environment has clients thinking about risk more frequently. They’re more risk averse and more conscious of putting in place investment and insurance solutions to protect their position,” Browne said.
I think it comes down to [the fact that] clients are experiencing losses … and they’re keen to mitigate financial loss. Now some of that is revisiting their investment portfolios. But equally, to mitigate losses … personal insurance plays a really important role.”
Aviva Australia’s distribution manager, Russel Hannah, has also noted a renewed focus on insurance from advisers, driven by their clients’ sense of vulnerability in the face of market instability.
We often find in terms of consumer sentiment, when things are fairly buoyant, often [they] don’t stop to take stock of what the risks actually look like. That’s certainly come to bear when we look at what’s happening in the investment market, but what it has done is certainly drive renewed focus and growth around insurance,” Hannah said.
With rising insurance sales, Aviva has also seen a spike in adviser and dealer group demand for education, support tools, and training in insurance products. Aviva is supporting workshops recently launched by Securitor to provide insurance training and education for advisers.
And it’s not only individuals who are taking steps to protect their wealth — businesses are also showing increasing interest in insuring against financial losses.
Tony Mcdonald, the managing director of Snowball Group, said accountants in Snowball subsidiary Outlook Tax and Accounting Solutions had noted a rise in the number of small business owners acting to shore up their business.
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