Australian fund managers could learn some lessons from Mexico, which is currently the world leader in life insurance distribution, according to a recent study by CommInsure.
“What we found is the Mexico model does this right,” CommInsure executive manager Jeffrey Scott said.
One of the major banks in Mexico had 1500 branches, and maintained a relationship with 150 independent financial advisers (IFA).
“If a person walks into the bank branch and they want to have life insurance, there is an immediate referral to an IFA who does all the insurance,” Scott said.
The whole process then took 15 minutes from the time the client sat down with the adviser to the actual issuing of the insurance policy.
“The client walks away and the adviser gets his commission. The bank has also retained the customer and actually sees an 80 per cent increase in profits, as well as the IFA making money on this as well.
“I think that model works incredibly well – outsource it to the experts, the bank still retains the client, both people make money.
“In Australia what we found is most banks do not have it right quite yet.” he said.
