Risk awards: Tower takes the lead in business risk

Money Management/Dexx&r Adviser Choice Risk Awards 2009

Gold: Tower

Silver: AIA Australia

Bronze: Westpac Life Insurance

Ongoing adviser education on the benefits of business overheads cover has contributed to Tower’s win in the Adviser Choice Risk Business Overheads Product Category.

Brett Clark, chief executive, retail life, said he regarded the success of Tower’s Business Expenses Insurance — Platinum & Gold product as a reward for that process of adviser education.

“Business overheads insurance is a category which is still generally not sold widely by advisers, but we think there are opportunities for more business expenses insurance to be transacted in the marketplace,” Clark said.

“We are therefore continuing our efforts to provide more information to advisers around the value of the benefit of business overheads insurance, so it can be placed more effectively with their clients.”

This adviser education is being delivered around regular adviser road shows and workshops around product enhancement, he said, adding that it had received very positive feedback from advisers.

In turn, Tower is also looking for “extensive adviser input into our product development to ensure they continue to meet the needs of the adviser force and their clients”.

The business overheads insurance product has also benefited from a comprehensive review of the entire retail life product range, based in part on adviser inputs, Clark said.

“This review was not specific to the business overhead product, but our success in the award category surely would reflect the benefits of that review,” he said.

This year’s category runner-up AIA Australia is also constantly looking at ways to drive more adviser sales of the product, according to David Mounsey, head of adviser services.

AIA Australia, which won the category last year as well as in 2007, will be looking at further upgrades in November to the product’s contract and also prices, Mounsey said.

“The product currently represents a very low percentage of our overall income protection sales, and we’re constantly looking at ways of improving the contracts to make it more marketable to advisers.”

Mounsey believes the category product contract structure and the cost has been a contributing factor to a failure by advisers to market the insurance to their clients.

“Advisers generally don’t sell the product on the basis they feel the value isn’t there for the cost.

“The benefit period is generally 12 months and the costs are quite high, so often they prefer to sell an income protection contract, where the benefit period is to age 65 and the cost not significantly more.”

A feature of the Westpac Business Overheads product — which has won silver in this year’s awards — is that there is no cap on the amount it allows the monthly benefit to be insured for.

“If a business owner has a certain amount they need covered, they can rest assured that these will be covered and paid under the policy,” said Andrea Brown, BT Financial Group senior product manager, retail product, life insurance.

The product — which will undergo a major upgrade in October this year — covers everything from trauma to TPD and business overheads as well as income protection and life cover, she said.

Brown also highlighted a recent automatic provision for CPI increases year on year, including for those clients who are being paid a monthly benefit.

“As the CPI increases, we increase the benefit to make sure that it picks up with inflation, and if, for some reason, a client needs the monthly benefit paid we also continue to increase that with CPI increases.”

The product also benefited from group-wide enhancements introduced in April to “make it easier for advisers to do business with us”, Brown said.

These enhancements, which fell under the theme ‘cutting through the red tape’, were aimed at improving underwriting rules and also simplifying takeover terms for people who wanted to transfer business to the insurer.

The group also considered ways to increase the maximum benefit limits for clients, and expand occupation categories that are covered, she said.