The revelations uncovered in the Hayne Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry are causing significant upheaval across the sector. While the initial exposés shone a light on some questionable practices in the banking sector, the latter part of the inquiry has focused on the insurance industry, highlighting the sometimes adverse influence of financial incentives earned by salespeople for selling “add-on insurances”.
As reported in The Guardian, Insurance giants Allianz Australia and Swann Insurance have moved to refund a combined total of more than $AUD80 million earned from “add on” insurance policies highlighted by the Royal Commission. Not only does this suggest that fallout from the Royal Commission may just only be beginning, but it highlights how using an insurance broker may be one way to safeguard you against purchasing not just costly, but in some cases, unnecessary policies.
What Does the Hayne Royal Commission Mean For Brokers?
In a recent address to the National Insurance Brokers Association (NIBA), organisation CEO Dallas Booth moved to reassure his members that NIBA was eagerly awaiting the commission’s report. While noting that the role of remuneration and commissions in the broking sector hadn’t been looked at in great detail by the inquiry, he saw the Royal Commission as an opportunity to re-consider the industry’s Code of Practice to strengthen community confidence in the industry.
“Code of Practice is going to be a big-ticket item in the Royal Commission recommendations, we can certainly see that,” he recently told members. “We want to make sure that the Brokers code of practice remains relevant, that it remains appropriate for members, but more importantly, it remains appropriate for clients and customers. The whole purpose of the code is to build confidence in Broking across Australia and we want to make sure that this continues to be the case.”
With a range of products available for many different lifestyle and business needs, the overwhelming access to information and choice of products on the market can seem daunting to the average person. Establishing a relationship with a reputable insurance broker and leveraging their statutory obligations, their knowledge, their experience and professionalism to your benefit, is one way to protect yourself against the trauma of discovering your insurance doesn’t meet your needs at claim time.
Your Insurance Deserves Your Attention
It’s fair to suggest that to most people, purchasing insurance is something of a complex chore. But when it comes to securing your assets, protecting your business or your family, insurance is an area of life that demands the right amount of time and energy being invested.
If you’re overwhelmed by competing information about the “right” cover for you, engaging the services of an insurance broker might be a cost-effective way of making sure you, your home, your family or your business is adequately covered should something unforseen happen. Not only that, but a broker can also help protect you from buying costly and unnecessary cover.
How is Service Better With a Broker?
Bound by the Corporations Act, Insurance Brokers are obliged to make decisions that are in the best interests of their customers. This means that their job is to work for you, and not the insurance company. It also means that you should feel confident about the quality of the advice you receive from a broker.
The latest report from the office of the national Financial Services Ombudsman provides some interesting food for thought when it comes to using an insurance broker against buying direct from an insurer. It showed that broker related disputes experienced a fall of 18 percent in the 2017-2018 financial year, when compared to 2016-2018, while there was an increase in the number of general insurance disputes lodged. In short, Insurance Brokers are working to ensure the products they recommend are better suited to their client’s real needs and avoiding costly disputes at claim time.
So, You Want to Use an Insurance Broker, But Aren’t Sure Where to Start?
There’s a lot of factors that impact which broker to begin a relationship with. As a general rule, keep the following in mind when shopping around.
A reputable broker should be happy to take the time to sit down with you and discuss in detail your situation. Once they have a thorough understanding of your insurance necessities they can then recommend a suite of products to choose from that provide exactly the kind of cover you need. Your broker should be able to explain clearly the pros and cons of each of the policies, enabling you to make an informed decision.
The Advantages of Partnering with Adroit Insurance & Risk
Partnering with Adroit to take control of your insurance needs ensures you’re getting the kind of cover you really need, instead of purchasing products that don’t serve you, your family or your business the way you want. With expertise across a range of industries, we take the time to develop a relationship with you to truly understand what you need – and don’t. We then apply our know-how to tailor genuine solutions that provides peace of mind and positions your business to take on tomorrow.
Keen to know more? Contact your Broker today.