Financial advisers can have a major impact
George Kolbe, Head of Marketing for Life Insurance at Momentum states that “The world is changing at a rapid rate and one of the main drivers behind this change is technology.”
“Technology, on a global scale, is altering the game, not only in the insurance industry but also in numerous other industries. This is not to say that financial advisers will become obsolete. On the contrary, financial advice remains crucial in ensuring clients become financially well. It is more about how we can use technology to create positive experiences,” says Kolbe.
Other factors that will have a major impact
Kolbe highlights that, “With technology impacting various industries, it has also led to a number of advances on the medical front which resulted in extending clients’ lives even if they suffer from a critical illness like cancer. Diseases that were previously viewed as ‘life threatening’ can now be ‘managed’ and even cured.”
“Also, media reports tell us that people, in general, are living much longer than before and with the medical advances in play, this implies that clients might be living longer but not necessarily healthier lives. Factors like these will have an enormous impact on the long term insurance industry when it comes to benefit design and client needs, especially when one considers that medical advances are moving to bespoke, personalised treatments. This is why having access to comprehensive critical illness cover and longevity protection that specifically view longevity as a risk, has never been more important,” says Kolbe.
Forging ahead in the future
“A shift is expected in the health and wellness environment with massive developments in the use of wearables. This will likely impact the life insurance industry on a global scale. Companies like “Feel” and “iBeat” aim to use wearables, technology and engagement platforms to actually prevent death, disability and critical illness events, leading to a reduction in claims. Apple also recently launched its latest watch, which according to Apple’s Chief Operating Officer, Jeff Williams, has the ability to flag potential heartbeat problems. Apple promotes the watch’s heart-tracking feature, as proof that the watch can help people proactively manage their health, and in doing so, prevent a number of critical diseases that could lead to disability. As a result, there might be the added challenge for insurers and financial advisers to understand the impact that these would have on the customer journey and advise on the use and benefits of ‘smart’ devices accordingly,” continues Kolbe.
According to Kolbe, “Nowadays, clients expect more personalised communication through the various channels and devices that they use, and companies that do not keep up with this shift, might lose their clients. This is where an Omni-channel, or universal, interaction approach can orchestrate the client experience across all channels so that it is seamless, integrated, and consistent. This will also have a direct impact on the way financial advisers engage with their clients. Omni-channels anticipate that clients may start in one channel, e.g. dealing with a financial adviser initially to identify risks and get expert advice on solutions and move to another, e.g. increasing their benefit limits online or via an electronic special offer, as they progress to fulfil a specific need.”
“However, in spite of all the technological advances, it is important to always remember that we are in the “people business” where unique client requirements trump any form of generic or standardised product design. This is because financial advice is different for every client, hence a trusted adviser is worth their weight in gold. Also, technology in its current form, cannot interpret client needs to the level where unique client needs match unique client experiences. This is only possible through active engagement with clients. This is why it is important to acknowledge that, no matter how much we rely on technology as an enabler, trusted financial advisers will always play a central role when it comes to helping clients achieving their desired levels of financial wellness,” continues Kolbe.
A word of advice for brokers and advisers
According to SCOR, they expect that long term insurers will evolve their strategies in order to influence and stimulate the Millennials’ demand for life insurance, since the penetration of life insurance for Millennials is not compensating for the shrinking base of other generations. They estimate that over the past few years there has been a definite shift in the traditional trigger points that historically fuelled the demand for life insurance.
Where pre-millennial milestones were very linearly defined and ordered in terms of; finishing education, finding a job, getting married, buying a house, having children, paying off the mortgage and then ultimately retiring – Millennial milestones are far more fragmented. According to SCOR, this evolution creates more opportunities for interaction.
Kolbe adds to this point by saying that, “This is where financial advisers play a crucial role because they can provide valuable input regarding current and future needs that might be linked to certain life stages and must be provided for in advance.”
Writers thoughts:
By engaging on a regular basis with Millennials and highlighting current and future risk factors, Kolbe mentioned that financial advisers can have a major impact on Millennials’ behaviour and the way they approach their financial futures. Do you agree? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts myra@fanews.co.za.
