Will any insurer do? How to choose the right one for your book...

It seems like a simple enough question, but have you ever really thought about the key points to take into account when deciding which insurer to place your business with? Rob Southey, Head of Liberty Corporate Distribution, provides insight into factors you should look at when choosing an administrator.

Many people make decisions based on word of mouth observations, for example, deciding which restaurant to go to. If you have heard good things about restaurant A, you are far more likely to go there as opposed to restaurant B where your friend’s colleague found a fly in her soup.

But this approach is not suited to the financial services industry in which financial advisors with widely different clients and varying operational requirements need to find the right insurance partner.

“Many of the points I am about to mention seem quite obvious, however, when you apply this list to many of the insurers around they will be found lacking in one or more,” says Southey. “It is not about fancy marketing and catchy sales pitches. You need to know that the administrator you work with is fundamentally secure, ethically sound and in a position to give you and your clients the support, time and service you require.”

Size

You need a provider who has sufficient financial stability within their Group or affiliated companies. Which companies make up their Group? Is their balance sheet big enough to weather any storms?

Reputation

Look for a provider that has a reputation for paying legitimate claims in good time, and takes into consideration the emotional and sensitive nature of some claims and the pressure this puts you, as the advisor, under.

Support structure

You need a provider that is efficient in terms of service and administration. Try not to get caught up in what companies say they can offer, but rather establish what they do offer. Will you be able to liaise directly with a service consultant? Will you and your clients be looked after and how?

Expertise

Look for a company that actively partners with you and shares expertise and information readily, so you can stay ahead in the dynamic financial services industry.

Track record

The longer a business has been in existence, the more time it has had to face various economic and business cycles. This bears testimony to the strength of management at the helm of the institution. The proof of the pudding is always in the eating...

Range of solutions for the client

Is the provider open to negotiation? Can you approach the provider with unique or unusual client requirements? Not all clients have the same needs. Furthermore, a client’s needs may vary as their business grows and evolves. They therefore need different sets of solutions at different times. The menu of available options that a client can take advantage of throughout its lifecycle is thus very important. A range of flexible options can alleviate the need to change service providers should the solution requirements change.