The time is right for AIG
AIG Life is working on a program to sell risk products through mortgage brokers as part of a push to boost its presence in Australia.
Managing director Stuart Harrison told Money Management that in the UK AIG has between 30 to 40 per cent penetration of the general population through mortgage brokers.
“I do not see why we cannot achieve similar results here as in the UK,” he said.
“We are working on how we deliver the advice, and no particular model has been selected yet.
Australian mortgage brokers are not licensed to give financial advice, a fact Harrison accepts.
“We will look at what general advice a mortgage broker can give, and perhaps one of our tied agents could sell the product,” he said.
“AIG will look at all options and run a pilot program for six months to see what is the best model to use.”
In the UK, mortgage brokers are linked to three or four risk advisers who provide the specialist advice.
Harrison said multi-channel distribution was normal practice in the 130 countries AIG operates in around the world. AIG has 400 tied agents in Australia.
Harrison said the Australian Securitiesand Investments Commission was supportive of what the company was doing in this area of risk product distribution.
“It is opening up the market for risk products, as I believe every single household in Australia should have life insurance,” he said.
“We have got 4,000 people a year dying without life insurance and we have got to do something about it.”
Harrison admits it is difficult to get mortgage brokers to talk to clients about risk despite research showing it is a perfect time to offer cover.
“It is an important part of the mortgage process, but mortgage brokers will not talk about life cover or ask the questions to get the sale,” he said.
“This is why I think mortgage brokers in Australia should be licensed, so they can provide advice on risk products.”
Selling risk through mortgage brokers is one part of the strategy to expand AIG’s business by tackling niche markets.
Harrison said another push would be selling risk to Australia’s Asian population.
AIG is a well-known brand in Asia and Harrison hopes brand recognition will enable it to expand risk products sales in Australia.
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