| Kippreport.com

EYEING OPPORTUNITIES IN THE LIFE SECTOR

August 20, 2012 11:00 by kippreport

What do insurer s and client advisers need to do?

Compared to more developed markets, with more stable, domestic populations, the GCC has greater complexity to deal with when it comes to financial planning for a variety of reasons: an emerging regulatory framework, and diverse backgrounds in financial education, language and cultural context.

At Zurich we are privileged to work with many advisers in the GCC whose clients match the diversity of the regional population. This gives us an insight into the challenges faced by advisers when either seeking new clients or working with existing clients on financial planning, almost regardless of their background. There continue to be common themes which almost all clients are concerned with.

Importance of advice

Research conducted by Zurich has indicated that individuals in the region rely more heavily on advice from friends and family regarding which financial products and serv­ices they should consider . This can be somewhat risky, particularly in times of economic uncertainty, where accu­rate, up to date, and holistic expertise is required to help clients gain a true picture of their needs and options.

Those organizations and their advisers who outperform, relative to their peers, during times of uncer­tainty, are the ones who offer a foun­dation of complete financial planning, based on the fundamentals of both life insurance and investment products.

The ability to address this balance has meant a change in thinking and practice, at both a corporate and indi­vidual level. Many client advisers who traditionally focused only on invest­ment-based advice, have invested time in developing an understanding of areas such as calculating appro­priate life cover levels, the process of medical reports, and critical illness definitions – all geared towards giving clients a solid foundation on which to build their financial plans. .

As and when financial markets become more settled and consumer confidence in investment markets returns, many advisers will consider the area of product focus – do they maintain a holistic approach or focus only on investment advice?

Based upon the evidence of previous market cycles, and working with a range of client advisers, all should ensure that savings, investment and protection advice remains a key part of their proposition. Recent political and economic events suggest stock markets will continue to be volatile and, with increased volatility comes increased uncertainty from those considering a new investment or savings plan, a fact re-enforced by Invesco’s 2012 “Middle East Asset Management Study”. Protection business, however, is not correlated in the same way to the stock market rises and falls, so a client’s need, and perception, should remain constant.

Importance of practical support from institutions

The wider financial services industry has a wealth of knowledge and expe­rience, gained from working with clients in diverse situations. This can be of real value to those in the GCC. The opportunity is to transform this knowledge and experience into practical, useable tools for advisers and clients to make informed deci­sions about their financial planning. This, in turn, will lead to increased confidence: the client confidence to seek professional advice, and subse­quent confidence in making informed financial decisions. 

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