I think the comments in Russell Hutchison's post linked here It's great information, but it isn't financial advice: need to be echoed far and wide, and I mean to everyone.
Research and research tools are a part of the advice piece clients need; at the same time, they are far from the single source of truth for making product decisions.
We use QPR and also Strategy Financial Services to give us a view on what the insurance product market looks like.
Sure there is a reasonable assumption that the best product for the premium is likely the best product for the client.
However, at the same time, some critical basics of assessing need and formulating advice also include:
- What their priorities are now.
- What the client wants to do in the future.
- What their medical situation is and what their family history looks like.
- What their financial situation is.
- What activities and past times do they do, including the job stuff.
- AND the bit the research hides that can be quite critical, how the individual policies will respond.
In selecting the 'best' product in the research, are you inadvertently selecting a product that has a better heart condition response over the desired cancer response? Because the rating company rated the best one on criteria that isn't so relevant to the client?
In general terms, yes, the rating of the market by research houses is going to be a reasonable guide to which providers and products are going to have a better general response.
At the same time, pure research decision making does not replace the recommendations and advice of a good adviser.
- We have one insurer that has expressed a distinct desire to avoiding insuring lawyers for income protection, guess what? We don't use that provider for income protection or disability benefits.
- Another provider has been tough on family history; again, we are wary of what someone may have in their family history when we advise on the provider. This could result in a premium that is 1-2 times the normal premium for a policy that responds in the same way elsewhere.
- Another insurer has recently declared what we can only describe as a war on the self-employed when it comes to disability coverage. Yes, they have some compelling reasons from their perspective, but this isn't about the insurer, it is about the client's outcomes when they are disabled.
It is up to the insurer to design the policies that they feel are sustainable. It is up to the Adviser to advise or recommend the ones that best fit the client's situation.
- Adding to this if we have an employee applying for cover and sometime in their future there may be a vague idea to run their own business, we wouldn't use the last company mentioned. Yet, the research today would say they have the best cover today. At the same time, we can arrange comparable cover now at a similar premium elsewhere that will adapt to that possible future need too.
There is an idea that artificial intelligence is going to take over what we do (everyone), but I wouldn't be quite so quick to confirm that.
- Sure AI is making inroads in many jobs and occupations, in factories they are replacing people, but elsewhere they aren't having such a good run.
- In financial services, I'm expecting to see augmentation of the advice clients receive with AI. But it won't take over and take away the nuanced aspects of human communication and behaviour in giving that advice.
- Generic advice, sure, that's what banks typically do already with complex products like disability and other life insurance. They have one option, and it fits everyone.
- When it comes to the work we do with a range of providers and products we have; it's not so easy to apply the cookie cutter.
And I know, I started in life insurance specifically to apply technology to the industry including digital and automated systems. And that was over 20 years ago.
With a very strong technical background and 20 years working with life insurance. I have a deep understanding of this bleeding-edge few others do, and most don't understand, which is somewhat interesting when you talk to people still stuck in the last century with their understanding and approach.
Does technology help us?
Yes, it does, hugely. At the same time, it is not going to replace the Adviser giving tailored advice specific to your needs.
Nor is AI going to manage the nuances of your policy against the challenging and stressful medical issues that you will face, or have to manage with a loved one.
Frankly, I can't see how AI or a robot is going to console and guide a grieving family through the insurance process in a way that ensures that those people are supported compassionately. Not to mention help them navigate the various issues and challenges that do pop up with claims.
The right answer for people is a mix of technology and people. Advisers supported by technology solutions to improve decision making, improve consistency of advice, minimise errors, and decrease the time required on every client to enable advisers to see and meet the needs of more clients.
Technology adds efficiency to the advice advisers provide, it doesn't replace it, and it certainly doesn't make it more effective. The Adviser is the part of the equation that makes it more effective.
If you want to set yourself on the right path with your risk management, you need to be working with us at Willowgrove.