1. The advice challenge: understanding what clients value
Banaf Davies – Senior Client Development Manager

2. agenda Background What are the insurance client segments?
How can insurers add value to the clients?
Key takeaways

3. 01
Life as we know it

4. Family time

5. Australian Life Insurance Market
61% of consumers from the ages of 18 to 54 find purchasing life insurance online attractive.
PwC Direct to consumer life insurance
2015 ?

6. FACTORS ACCELERATING CHANGE
Consumers are more informed and empowered than ever before
Digital technology lets consumers compare value and expand their choices
Data disruption allowing new people to venture into financial services
Growing consumer self sufficiency
Old notions of value and loyalty are breaking down
How do we stay relevant to our customers?
Services better than ever which need to be provided at a lower cost
‘New normal’ level of expected customer service
Customer expectations

7. THE CHALLENGE TO STAY AHEAD
Understand what clients value
Deliver on what they value effectively
Stay relevant

8. 02
Client segments

9. How are you servicing your clients?
90% or more clients say their adviser provided:
Tailored insurance advice
Trusted adviser relationship
Excellent customer service
Help with product and provider selection
Transparent communication about fees
Less than 50% of clients say their adviser provided:
Education
Value for money
Source: The advice challenge: Understanding what clients value, AIA Australia and Beddoes Institute, July 2015

10. What do your clients want?

11. Three Client segments
Source: The advice challenge: Understanding what clients value, AIA Australia and Beddoes Institute, July 2015

12. 02
client segments
Now we are going to look in more detail around the clients segments

13. Ethical and independent advice Claims management assurance
purists
A tailored insurance plan customised to their needs, circumstances, goals and objectives
Ethical and independent advice
Claims management assurance
Positive impacts when Purists feel confident that ethical and independent advice is provided
25%
stronger relationships
28%
uplift in perceived value
Purists place no value on help with product and provider selection, service, the relationship or peace of mind.
Source: The advice challenge: Understanding what clients value, AIA Australia and Beddoes Institute, July 2015

14. purists
“My adviser was focused 100% on finding a solution to my insurance needs and providing the most competitive and suitable
products available.”
Source: The advice challenge: Understanding what clients value, AIA Australia and Beddoes Institute, July 2015

15. personalised advice seekers
A tailored insurance plan customised to their needs, circumstances, goals and objectives
Personalised Advice Seekers are least concerned with getting significant value for money.
They believe in the value of advice and inherently know that they will get a better outcome using an adviser than going direct.
However, they are the hardest to please.
Only
10%
more loyal if their needs are met
Source: The advice challenge: Understanding what clients value, AIA Australia and Beddoes Institute, July 2015

16. personalised advice seekers
“My adviser explained in detail what our options were, listened to our questions and answered them satisfactorily, made
changes that we requested and didn’t pressure us into taking out insurance that was excessive or didn’t meet our needs.”
Source: The advice challenge: Understanding what clients value, AIA Australia and Beddoes Institute, July 2015

17. value seekers
Value Seekers want to know that the value of taking out insurance through an adviser outweighs the premiums
or fees they pay.
They want high quality communication to reflect their perception of value.
16%
more loyal when they feel they’ve received significant value for money
25%
more loyal when quality communications are received
Clients need to know that advisers are ‘earning their money’ rather than adopting a ‘set and forget’ approach.
Source: The advice challenge: Understanding what clients value, AIA Australia and Beddoes Institute, July 2015

18. value seekers
“Quick action. Thorough answers to my questions, good explanations. Quick to get back to me with queries.
Was able to lift exclusions my spouse had on her previous insurance cover.”
Source: The advice challenge: Understanding what clients value, AIA Australia and Beddoes Institute, July 2015

19. Working together to deliver value
Value of advice
Policyholder Return on Premium
(PROP)

20. Why does it matter?
There is a strong correlation between meeting the unique needs of each segment and the level of client satisfaction, loyalty and advocacy.
Source: The advice challenge: Understanding what clients value, AIA Australia and Beddoes Institute, July 2015

21. Insurer-client value drivers03
Insurer-client value drivers

22. What do clients value from their life insurer?
Claims management assurance
Life industry pays $4.9bn in claims in 2014*
AIA Australia paid out $861m in claims in 2014 *
Source: The advice challenge: Understanding what clients value, AIA Australia and Beddoes Institute, July 2015

23. Policyholder return on premium

24. 75% Life insurance prop How can insurers add value?
of clients highly value being able to lower their life insurance premiums by participating in a health and wellness program as a part of life insurance that is based on dynamic underwriting.
Source: The advice challenge: Understanding what clients value, AIA Australia and Beddoes Institute, July 2015

25. AIA Vitality – more than the traditional life insurance
Dynamic pricing providing more value to the member

26. 04
Key Takeouts

27. Personalised Advice Seekers
conclusion
Value Seekers
Never assume that a prospect understands the value that the adviser will bring to the insurance relationship.
Demonstrate to your clients what you have done and are continuing to do to ‘earn their money’ rather than simply taking a ‘set and forget’ approach.
Deliver relevant, timely and easy to understand communications on an ongoing basis to keep them informed of their insurance plan and changes that are relevant to them.
Personalised Advice Seekers
Clearly demonstrate that your recommendations and advice is customised to your clients’ needs.
Communicate that tailored advice is core to your service and incorporate these messages into your marketing and communication material.
Purists
Demonstrate to your clients that you are behaving ethically and how your advice is unbiased and independent.
Regularly reassure your clients that you will be there to manage a claim should the need arise.
Clearly convey the message that tailored, ethical and independent advice is core to your service and incorporate these messages into your marketing and communication material.
Source: The advice challenge: Understanding what clients value, AIA Australia and Beddoes Institute, July 2015

28. Thank you

29. Disclaimer
Confidential - Not for reproduction or distribution without the consent of AIA Australia. The content is current as at the date set out on the cover page of this presentation and may be subject to change. This presentation provides general information only, without taking into account the objectives, financial situation, needs or personal circumstances of any individual.  This presentation may contain projections concerning financial information and statements concerning future economic performance and events, plans and objectives relating to management, operations, products and services, and assumptions underlying these projections and statements. It is possible that actual results and financial conditions may differ, possibly materially, from the anticipated results and financial condition indicated in these projections and statements.