Giving the insurance industry a makeover

For the most part, people have a negative view of insurance and the insurance industry. Many consumers see insurance as a “grudge” purchase and feel that insurance salespeople just want to push a policy and move on. And while it’s true that some advisors disappear after selling a product, many work diligently to establish relationships and build trust. Unfortunately, damage has been done to hurt the overall image of the insurance profession.

To make matters more difficult for the industry, many consumers fear their claims will not be honoured. To put it simply, they just don’t trust insurance companies. And it’s hard to defend the industry when it is showing signs of neglect. Insurance companies have disbanded their sales force, going to the Managed General Agency (MGA) model, and created looser networks with less support and limited collaboration among brokers. Also, the average age of today’s advisor is 57. The older, established broker-to-broker support networks are diminishing as seasoned agents retire, and these networks are being replenished by new recruits who don’t share the same vision of a unified insurance industry.

We have to act now to resuscitate our image and build back our industry’s reputation, especially because the Canadian health-care system infrastructure is starting to sag under the weight of an aging population.

Five Ingredients for an Industry Image Makeover

Here are my five suggestions for how the insurance industry can rejuvenate its image and values. We need to focus on ourselves, the insurance companies, and our professional associations to repair the damage and redevelop trust with clients.

1. Unifying Our Image Through an Industry-wide Public Relations Program

The insurance industry does a poor job of marketing itself. As insurance advisors, we have many positive stories about how to regularly bring comfort to families. We need to make a concerted effort to partner with one another and with the insurance companies to bring this impact to light. A sustained, collaborative and consumer-centric advertising and public relations program would raise awareness of the benefits of insurance solutions and increase consumers’ peace of mind around the uncertain future. Insurance companies could support advisor advertising initiatives through the same type of co-op funding model that investment professionals have benefited from for many years.

2. Raising the Bar Within the Insurance Profession

With increased formal accreditation, such as the Certified Financial Planner (CFP), and ongoing professional development, as insurance advisors we can elevate the knowledge and expertise of our profession. Formal accreditation ensures that all advisors who go through these programs have internalized a strong base of accepted best practices. Clients benefit from the rigour and validation associated with the enforced standards offered by accreditation bodies. Certification also allows CFPs access to ongoing professional development, which will increase their knowledge and the quality of their advice and insight for clients.

3. Supporting our Professional Insurance Community Associations

By joining Advocis, CALU, MDRT and other professional insurance associations — and supporting their events — we can build and sustain our industry’s future. I would say that Advocis is a must-join association for any insurance advisor. If we all become part of an association, we can demonstrate our collective strength as a community of insurance advisors. We’ll have a stronger voice within the industry and with the government. With new products coming into the market, association events offer useful ways to share insights and experiences, and to discuss insurance products and offers with peers. With new insurance advisors entering the profession, we should connect with each another to find better ways to serve consumers. We can build their knowledge, not only of the industry, but of one another. Referral-based selling is good for sales and also enhances our reputation when we can provide our clients with sound solutions assisted by experts in any given area.

4. Talking the talk

We can’t just promote awareness about the value of our services. We need to demonstrate integrity and develop and sustain long-term relationships with our clients, by understanding their needs on an ongoing basis — both their current needs and how they should prepare for unforeseen future events. Advisors should stay connected with their clients through annual reviews of their clients’ plans, newsletters and regular communications. We have a proactive role to play in sharing information with our clients about new offers. I even ask my clients to sign waivers to ensure that I’ve informed them of an offer. By doing so, they are clear that they’ve received the best information I could provide them to make the most informed choices for their family.

5. Believing in what we do

When we propose solutions to clients, we should take great pleasure in their comfort and security. Advisors need to be enthusiastic and believe in what they do in helping their clients have more peace of mind about their future. I’m gratified to know that I’ve played a small role in alleviating some strain — financial or otherwise — when my clients are in their greatest need. It’s not easy to stay connected in an industry where the networks aren’t necessarily well-established, where products have subtle nuanced differences and where the need to establish trust with clients requires a great deal of honesty and trust, and yet the personal rewards are great.

Our clients should know that they can depend on us to take care of their needs. It’s our job to ask the tough questions, to propose scenarios and to offer solutions. All advisors should do a full 360-degree assessment of clients’ current financial situation and how it could change in the future. Shoring up areas of potential vulnerability enables clients to be secure about their financial well-being for themselves and their families.

Most often, insurance solutions are not enough. The majority of Canadians don’t have wills. There are many basic housekeeping questions that need to be asked: are there powers of attorney, updated beneficiary designations, an estate directory? Advisors are often the ones to help clients build their financial plan beyond their insurance needs.

To Sum It All Up

These are just five ways we can individually and collectively make a difference to Canadian consumers. Whether you are an insurance advisor or an individual working for a Canadian insurance company, we need to work together to build a positive cohesive image for our industry. Together, we need to create a secure future for Canadian consumers and rebuild the trust that has diminished in recent years. We must build a feeling of comfort, security and confidence for consumers. And we should begin today.

Mark Halpern, CFP, is the founder of illnessPROTECTION.com Inc.

(09/11/08)