This paper is based on adviser insights gained through a survey of the XY Adviser member base and a series of in-depth interviews. We wish to thank the following advisers for their participation and their willingness to share:
If Mark Twain were asked about the market for life insurance, he may well declare that ‘reports of its death are greatly exaggerated’, and he’d have a point. While the sector has had more than its fair share of doomsayers over the last 3 years in particular, the fundamental need for life insurance – and the demand for life insurance advice – remains as strong as ever.
Of course, the market has undeniably seen powerful structural disruption, in the form of stricter professional development standards, remuneration capping, and group life opt-in requirements for under 25s.
While the demand for life insurance advice has held up, the accessibility of that advice has reduced dramatically, with adviser numbers having dropped by around one-third over the last three years, and the cost of providing advice increasing by roughly the same margin.
Interestingly, Zurich has found that the number of active risk writers has decreased at a less significant rate.
The most successful advisers are those who have the confidence to turn challenge into opportunity.
They know that the role of life insurance in protecting the wealth of consumers remains absolutely foundational to financial advice. Life insurance remains the base upon which all wealth accumulation is built (and without which, the best laid financial plans can be ruined).
Furthermore, they know that this mismatch between the demand for and supply of life insurance advice is a massive opportunity. An opportunity to bring consumers into the advice ecosystem for the first time. An opportunity to demonstrate the value of advice. An opportunity to create long-lasting relationships with more emotionally connected clients.