Risk becomes more concentrated
It has become ever more important to be a planner's most-used insurance provider, according to a new report released by Investment Trends.
According to the July 2013 Investment Trends Planner Risk Report, around one third of 1159 planners who participated in the survey said they had reduced usage of an insurer or stopped using one altogether, with senior investment analyst Recep Peker saying this did not mean they would start a relationship with someone else.
"This has resulted in the greater concentration of risk businesses written," said Peker.
"Planners write 64 per cent of premiums through their most-used insurance provider, up from 61 per cent in 2012 and 54 per cent just five years ago," he added.
"It has become even more crucial to be a planner's most-used insurance provider."
According to the report, AMP has topped the market in terms of primary relationships with advisers, followed by OnePath, AIA, TAL and BT Life.
Another highlight is the decrease in the amount of client time financial planners spend on life insurance, which came about as investor sentiment improved and flows to growth assets increased.
"The volatility in the markets that lasted most of 2011 and 2012 had driven planners to focus on increasing the role of insurance advice within their businesses, but the return in confidence earlier this year has meant planners were able to write a lot more non-risk business this year," said Investment Trends senior analyst Recep Peker.
"An outcome of this is that they are again spending the normal amount of time talking to clients about their insurance needs."
However, those who write risk estimated they had written 5 per cent more in annualised risk premiums in the last year than the previous study had recorded, Recep said.
FOFA reforms may cause planners to write more risk business, with 23 per cent of the 1159 planners participating in the survey saying they planned to provide more life insurance advice as a result of the new legislation.
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