Direct sales not a threat to advisers: Sligo

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Trade Me enters the life insurance market with the acquisition of online sales channel Life Direct. Philip Macalister asks Life Direct founder Conor Sligo whether advisers should be worried.

Thursday, August 22nd 2013, 7:56AM 1 Comment

by Philip Macalister

LifeDirect is one of the two main businesses run by Inform group with the other one being Quote Monster.

The 11 people at Life Direct, including Conor Sligo and Tim von Dadelszen will move across to Trade Me.

Sligo says some changes are coming up at Quote Monster and these will be disclosed soon.

The price Trade Me is paying of Life Direct isn’t being revealed however it is understood the final number will be determined on the performance of the business over the next three years.

Sligo says the deal is good for Life Direct and will help it grow. He doesn’t believe the direct sales model impacts on advisers as people who have decided to buy online have also decided they don’t want to deal with advisers

“We don’t really see ourselves in competition with good advisers,” he says.

However he does think the direct model competes with bank-originated life insurance sales.

Sligo wouldn’t reveal what level of API the company writes each year, but says it has around 10,000 customers. Its two key products are term life and health insurance with the split being around 60:40.

He says the mix of sales can be quite volatile, and it is very hard to understand what drives sales.

One thing Life Direct has learnt is that price isn’t necessarily the driver of sales. Other drivers are things like financial strength ratings customer service ratings from customers.

“We’ve never been able to pin down what drives interest in insurance sales,” he says.

Sligo says that there is a perception that online life companies don’t offer any help at claims time. However Life Direct has an administration team of seven who help customers at claim time.

One of the key benefits for Life Direct is the reach it now gets. Good Returns understands the company spends a significant sum on advertising, thought to be close to a seven figure number, and that is spent mainly on online ads and television commercials.

As Trade Me is the biggest site in New Zealand with an audience which is engaged and transacting online Life Direct gains a significant boost to its promotional efforts.

Earlier story: Trade Me enters life insurance market

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