Paul Avis looks at how much money group risk advisers are actually making.
Bath is posh - and a gardener there can cost about £25 per hour! That is the same amount as an adviser could be paid when working in the Group Risk small scheme sector if they need to do a full market review for a client.
If the annual premium is in the region of say £5,000 for an SME, with 4% commission for a group life (GLA) scheme (or £200) and 12% commission for a group income protection (GIP) scheme (or £600) - just how much time is actually spent collating a client report?
We all know that, before the client has been visited or the post sales administration starts, a full market review can take as much as 8 hours. So, if a GLA policy is purchased by the employer, this equates to £25 per hour - and £75 for GIP.
So, what can be done to expedite this process and make Group Risk worthwhile in this employer segment? Perhaps most importantly, many insurers now have online quote engines, so to gain indicative quotes, advisers should choose one and get familiar with it.
In assessing which platform to use, an adviser should consider all aspects of the functionality and the terms and conditions available.
One key condition could be the benefit level below which no underwriting is required (to avoid post-sale administration). Also, how relevant the insurer's proposition is to SME?
For example, with GIP some insurers have online and telephone legal support helplines which provide staff handbooks, contracts of employment, Health & Safety supporting materials, disciplinary letters etc.
These can all be customised, so for an SME with no Human Resources support, this is perfect. Otherwise they may have to pay outsourced legal service supplier fees.
In addition, SMEs tend to know individual employees more personally than larger employers, so having an Employee Assistance Programme can help the management team depersonalise situations, if an employee or their family members are struggling with any aspects of life.
Having chosen the supplier the next step is for the adviser to get to know the insurer really well and to understand their products and services (the value proposition).
The insurer can help the adviser communicate the value inherent within the insurance contract to their clients, via reports and supporting material.
At client meetings advisers can be armed with wallet cards, flyers and posters, or even an online demonstration of any additional health and wellbeing services.
This should not only enhance the sale but make sure that, as daily use of these benefits is being encouraged, the client will want to retain the benefits whether or not insurance claims are made in any year. Without these, the employer may struggle to see the need to renew the policy.
Suddenly £200/£600 for a few hours' work seems very feasible - and may help you to afford that gardener!
Paul Avis is marketing director at Canada Life
Further reading:
Group risk covers 1.25m more people - Swiss Re report
Why advisers must refocus on group risk
