Risk advisers forced to reconsider which clients they can afford to serve as remuneration changes loom should consider targeting the small business owners market, says Zurich.
With the future of remuneration still up in the air, Zurich said the final outcome will “inevitably” see many advisers reconsidering whether their value proposition and target market are still appropriate.
With this in mind, Zurich head of distribution for life and investments Kristine Brooks said small business owners will represent a “significant opportunity” for risk specialists seeking “lucrative” segments with a latent need and willingness to pay for advice.
“At a time when life insurance advisers are looking to build a stronger, more focused value proposition, business insurance and succession planning represent opportunities for advisers to develop specialist skills which will not only differentiate them from their peers, but will also allow them to tap into customers with more willingness and capacity to pay advice fees,” she said.
Ms Brooks explained that while Australia has a “concerning” underinsurance problem, the lack of appropriate cover in the small business sector is a “ticking time bomb”.
“The illness or injury of a small business owner can put at risk not only their own lifestyle but the very survival of the business,” she said.
“This can affect their employees, suppliers and even their customers, effectively multiplying the financial devastation that underinsurance or mis-insurance can cause.”
Citing research conducted by the Cameron Research Group – which comprised 11 focus groups and a survey of 750 small businesses across Australia – Zurich said only 58 per cent of business owners have life cover and only 41 per cent have income protection.
The research also found that only 43 per cent of small business owners had TPD cover and 16 per cent had trauma cover.