[OPINION] Is the risk industry at risk?
That is the question I’m asking myself, after making the audacious decision to return to providing risk management after 20 years of making a comfortable home in the investment world.
Monday, December 30th 2024, 6:00AM 
8 Comments
By John Milner - Collaborative Consulting Ltd
Sounding like a Pantene Shampoo ad - this decision didn’t happen overnight, but it did happen. After working in financial services since 1988, I had enough of hearing the blood curdling shrills from risk advisers, having to climb the apparent Mount Everest of education – Level 5. I personally completed all strands of Level 5 in 2007, while working through to my CFP and CLU designations. I consequently made Level 5 the minimum standard for my business at the time, well before it became mandatory for AFAs.
By 2023, all advisers were required to be licensed under a FAP. I believe this was the turning point of my personal risk adviser’s career, who after 20 plus years of acute amnesia, began actually emailing me. What a revelation.
He did know who I was after all, and he did care about my welfare. I then excitedly speculated on how he would fit 20 years of birthday cards in my mailbox. But alas, it wasn’t to be. I guess the renewal commission just didn’t cover such things like, you know, communication and stuff.
Now getting to the insurers themselves. Surely it is solely the fault of those bottom feeding advisers that have put risk in this situation. I decided it was time to make a difference in the world of risk management and dedicate some of my time to reintroduce professionalism and service to this industry.
However, I was advised “it is not easy obtaining an agency right now”.
This by a seasoned administrator, working for a long-time and well-respected brokerage business. How could this be I thought. And why? Could Kiwis be possibly over-insured?
Not appreciating the concept of the word no, I subsequently contacted five insurers by both phone and email. Apparently, insurers lack the ability to speak, so the internet is the sole means of communication these days.
On average, for the companies that did finally respond, it took a minimum of two weeks. For others, like Partners Life and nib, well they appear to be missing in action. The surprise however, or not, was Fidelity Life. This little Kiwi battler, who themselves admitted to dropping the ball several years ago, is now attempting to rise like a phoenix from the ashes.
My call was returned on the same day, which was a Friday afternoon. Over the weekend I received an agency questionnaire and by the following week I received my agency confirmation.
And unlike the other life companies, they actually invited me into their offices for training with a staff member.
I do at this point wish to thank Asteron, who did finally speak to me in their offices and issued me with an agency. Thank you, Michael. And AIA for issuing me with an agency. Although I haven’t managed to speak with a human yet, I have every confidence there is one left in that building somewhere.
After what seems like an epic war of the minds, I’m on the way to delivering risk mitigation strategies to the public. But should it be this hard? And does this non-existent level of service provide me with any confidence of security for my clients – no.
From the outset, insurers had such a low expectation from an enquiring adviser, while at the same time, overall, provided such an appalling response and service. Rather than welcome me, it has been rather adversarial from some.
The gossip on the industry grapevine is no better. With talk of well below levels of staff, embattled BDMs and the odd nervous breakdown thrown in.
Our country, like many others, does have a staffing issue. However, somehow by contrast, my world with investment could not be any more the opposite. With BDMs working very hard to create enduring relationships with their business partners.
If insurers want to make a change, it will have to come from the top. As the saying goes – “the fish rots from the head down”. That means boards down, who I hold responsible for this situation. After all, that’s your job.
We could also do with some of that “reach for the stars” culture from our cousins in Australia when it comes to advisers. You have lost the ability to gain your CLU designation because of poor support. It’s time to lift your game and walk the talk of professionalism as you wish to be regarded as so badly.
One last note to the boards of all insurers; efficiency is great, but as one dear friend reminded me recently, “culture beats efficiency every time and twice on Sunday”.
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Comments from our readers
It was better 30 years ago on all the points you raise. An e-app we were told would speed up processing over a paper app. It takes on average 9 days from pushing the button on an e-app for it to get to underwriting at Partners Life. Even a very simple app. And they still think they are marvelous.
Your point about CEO's, I would say most of them have no idea of the adviser experience and client experience, if they did this unbelievably poor service from almost all insurers would be arrested.
With regulation and poor insurer service to help us help our clients, the cost of delivery has gone up enormously, almost like the CEO's salaries.
I would like someone (an insurer) to help me understand what is a BDM now and what I can expect? I think we have finally reached an all time low on customer service and adviser service and I get really tired of Partners Life being held up by inexperienced/not knowing advisers as some sort of innovator.
Those of us that have been around have had far better service in previous years with less technology. Insurance company staff would front and would answer phones and see a problem through to the end. CEO' were visible and knew they had to take feedback. Now CEO's if they see adviser at all are very select and go visit their fans.
I truly believe this year as advisers we should almost demand a lot more from our suppliers to help us deliver to our clients. I feel we have sat back and let this rot occur for long enough. We have worked to try and preserve business while their staff fumble about taking days to get back to us. All this poor service has carved into our time and revenue whilst we are trying to assist clients. Anyway John, my best to you again, you are a good adviser and I hope things improve.
Another adviser told me the story of when she applied to a health insurance provider to have a writeback paid off over time with incoming new business. This had been done before with the same insurer.
The insurer once again agreed, then a few weeks later came back to demand payment. Many email demands went on until the adviser suddenly realised she was dealing with the very same administrator who agreed to the arrangement.
Once the adviser asked the administrator to scroll down the email thread and find the agreement in place, she confirmed the agreement and dropped the issue—with no apology to be found.
Advisers and clients deserve better. When are compamy boards going to step up and walk the talk? Their jobs aren't just the P & L and flashy corporate photos. Step up, as you constantly expect the hard-working advisers at the coal face to do so.
Current insurer inefficiencies are creating very poor customer outcomes and experiences. It has become very frustrating for FA's and worse, some FA's are swallowing the stupid old excuses from insurers such as, we are so popular and getting so much new business we are struggling to keep up. It is time their leaders realized they are the major problem in the industry right now, not advisers.
This has become a very serious situation now where almost all enquiries take 2 weeks to get an inch further (not necessarily resolved, normally another question an adviser has to go back to the client with) and new business processing is shocking and underwriting outcomes appear often to be churned out by inexperienced staff and often need to be challenged and changed.
I think during 2025 advisers should keep this an issue so we can firstly assist clients in a timely and effective manner and so insurance company inefficiencies stop chomping into our shrinking margins!
It may be a good theme for Goodreturns :)
I once had the opportunity to remind a prominent CEO of an insurance company (that sadly is no longer with us), that the Australasian financial services industry is extremely relationship-centric and equally fragmented (both geographically and philosophically). My suggestion to this individual (who later went on to have a breakdown) was to forget short term cost savings in favour of supporting the dispensers of his company’s products. Alas, the bean counters won that argument - and well - the rest is history.
Again, I don’t profess to understand the insurance industry although do have a sense of human behaviours - with the majority of financial professionals preferring to work with people whom they know and trust.
The idea that advisers are customers of insurers seems to have gone out the window. See my comments on agencies last year where I rant in a similar way.
The idea of service across the industry, compared to where it has been, seems to have died.
This ride is only just getting started, better strap in tight.
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I call it being so smart they're now stupid.
@John if you want to have some real fun try reaching out to SX.
I once had a meeting with a BDM from there.
I went in thinking that BDM would extoll the virtues of SX and try to convince me I should have an agency.
Turned out the SX BDM was there to hear me extoll my virtues and try to convince them why they should give me an agency.
The only reason the meeting didn't end sooner was because I paid for the coffees and I wanted to finish mine.