Coronavirus has had a massive impact on industries worldwide. Here in the UK, we are reaching the end of the initial three-month lockdown period, and restrictions on businesses and individuals are starting to ease. This will be a huge relief to brokers and advisers, many of whom have had to rapidly adjust to challenges including furloughs, working from home, and reduced staffing levels.
Gradually, we’re seeing small steps towards normality; but is a return to the old “normal” really the best outcome for the insurance industry? Advisers have made a determined and impressive effort to adapt, finding ways to bolster their businesses amongst the chaos. New, positive working habits have been formed, and new opportunities identified, that can and should be maintained in the long-term, after the pandemic is over.
One notable example of these is the shift to general insurance. During the 2008 recession, many advisers began selling GI as a way to supplement income. The same approach has been resurrected now, to tackle this new period of uncertainty in the property market. It’s a potentially lucrative tactic; Paymentshield research has shown that advisers who sell four GI policies per month can earn almost £50,000 in commission over a period of five years.
Even though new mortgage clients are currently less frequent, advisers can focus on remortgage and product transfer clients, upselling to help close any temporary income gaps. Continuing to sell GI to remortgaging clients can build up a recurring income stream in the long term. Advisers wanting to begin selling GI can start by checking their back book to identify if any previous clients are due to remortgage, and proactively get in touch with them. Offering to review the financial products of current clients will also help to detect any opportunities.
Despite the profitable nature of GI, a recent Paymentshield survey found that 60% of advisers struggle to sell General Insurance (GI). Forty-five per cent said that less than a quarter of advisers in their business actively sell GI. However, without commutes and face-to-face meetings, some advisers have been left with additional time during the working day and have used it with continuous professional development (CPD). General insurance is just one example of this; many advisers have always planned to get to grips with GI, but felt they hadn’t the time, until now. Making time for learning new skills and improving existing ones should be kept as an on-going priority.
Taking advantage of available CPD resources isn’t the only way to learn. During the pandemic, whilst staying home to stay safe, people have turned to digital communication tools and social media to stay connected. Using them to cultivate better business networks provides an opportunity to share best practice, helpful tips and guidance, and industry news with peers. Right now, the focus is understandably often on how to adapt during the pandemic, but carrying this culture of sharing and collaboration beyond the current outbreak will help adviser businesses to thrive in the long term.
Digital tools aren’t just for industry peers to connect. The financial landscape is turbulent, and many people are suffering from finance-based anxieties, which are closely related to poor mental health. As trusted consultants, financial advisers and brokers have been able to play a key role in helping people through the crisis through conversation. To achieve this whilst still keeping themselves and clients safe, they have forgoed meetings in favour of phone calls, video calls, or even social media.
In reaching out, brokers are helping to build a healthy future pipeline. Proactively contacting clients to offer guidance can help clients better understand their finances, such as whether their current products still meet their needs or need updating, and where they might be able to improve their financial situation. When social distancing measures are fully removed, we should ensure that this focus on proactive, multi-channel conversation stays.
Rebuilding after the pandemic will be challenging. It is impossible to say how long it will take to recover following this emotionally and financially difficult time. As we celebrate each incremental step towards better times, the insurance industry can make a collective effort to maintain the good habits developed during coronavirus, using this opportunity to shape the future of adviser and broker businesses for the better.
Rob Evans, CEO of Paymentshield