Risk software suppliers face a dilemma. Advisers want a program that is simple to use, yet sometimes they want highly sophisticated software that will look at every option for the client.
The suppliers have to meet both needs to stay in business.
Aviva general manager products Tim Cobb says risk advisers are looking for easy to use, accurate software and will reject any product that doesn’t meet those criteria.
“The adviser wants to put the client data in, run a number of different quotes and find out what will be the cost using different sums insured,” he says.
Boss Software International general manager sales Gary Douglas says there are several components to risk software that are essential to meet advisers’ demands.
“The adviser wants to enter the client data and then search the software for products that match that criteria,” he says. “Alternatively, they can look for the scope of advice that will lead to a product-specific solution.”
Douglas says there will also be times when an adviser wants to undertake a sophisticated analysis of a client’s insurance requirements.
Cobb says this type of analysis highlights the need for an adviser to be able to look at subtle product differences that will match the client’s exact needs.
“On an income protection product, the adviser needs to look at areas such as wait periods and how this will affect the costs,” he says. “However, a lot of advisers have a good idea when a product will match the client’s needs.”
Douglas says the complexity of the search for the right products is up to the adviser.
“The adviser can set the search filters to be as complex as they want,” he says.
In recent surveys of advisers, Boss has found that up to 60 per cent of advisers use the software in front of the client.
Douglas says this highlights the need for efficient software that will produce results that are understood by the client.
“After the needs analysis, the software will perform a qualitative analysis of the features of the products for that particular area of insurance,” he says.
“The software will rate the products based on some features being more important than others to meet the client’s needs.”
The Boss risk software can be tailored to match the adviser’s search criteria. Douglas says one adviser may want the software to print out all income protection products that match the client’s criteria. Another adviser may only want the top couple of products.
“Then there is a quantitative filter that will look at premium data,” he says.
Fintech Australia director Neville Krynauw says his risk software product has been designed to meet the Australian Securities and Investments Commission’s (ASIC) requirements of an adviser under FSR.
“What ASIC wants to know is how the adviser arrives at what they are going to provide to the client,” he says.
“It is about how the adviser unearths the (client’s) problem.”
Krynauw says this requirement highlights the fact that the bureaucrats have never understood life insurance.
“Life insurance is sold, it is never bought,” he says.
“Who wants to talk about death or disability? That is why risk is sold.”
Krynauw says the adviser wants to check areas such as premiums after they have found a number of suitable products through the software.
“Software helps bundle the various aspects of products being offered by the life companies,” he says.
“Our software examines the client’s problem, but then adds on functions such as product rating, so we are just the connection between various services that makes the system all encompassing.”
Cobb says it is important that software has the ability to save client data and proposals so reviews can take place in future years.
Aviva is also looking at how it can make the delivery of client data to the underwriter more efficient.
Currently, the adviser produces the quote and then has to send the application forms by fax or mail. Cobb says Aviva is developing software to enable electronic delivery of application forms, which should be a much more efficient method.
Douglas says having a record of quotes stored is also important for compliance when a client might dispute what was said at the start of a policy.
“If in five years time, we don’t agree with what the client is claiming, the software can show a proper needs analysis was completed and what was recommended is justified in the statement of advice,” he says.
