Do your clients still see insurance as a grudge purchase?

Do your clients still see insurance as a grudge purchase? | Insurance Business

Do your clients still see insurance as a grudge purchase?

There’s no question insurance is still seen as a grudge purchase by the vast majority of policyholders – however, one industry head says brokers have the ability to change the situation.

Phuong Ly, executive manager of IAG’s broker and agency solutions, says brokers should be helping their SME clients see insurance as a crucial investment rather than a bitter expense.

“I think there is an opportunity to change the dialogue to show how insurance can support ambition by shifting the perception of insurance from being a grudge purchase to an important investment in the future success of the customer,” he told Insurance Business.

Ly’s comments came after CGU Insurance, a subsidiary of IAG, released its Ambition Index which suggested a fear of failing may be preventing many Australians from acting on their ambitions.

In fact, nearly half (44%) of respondents said they worry too much about failure to act on their ambitions – such as starting or expanding their business.

“Insurance is still the most cost effective way for businesses to transfer their risks,” said Ly. “Brokers have always been there to support their customers in finding the appropriate protection to give customers peace of mind.”

Ly also noted that brokers can start shifting the perception around insurance by educating their SME clients on the difference between risk and opportunity.

“Risk and opportunity are one of the same, both are uncertainties, however, the former has negative impacts while the latter has positive impacts,” he said.

“Brokers play a key role in helping customers distinguish between both and supporting them with risk management and insurance protection that will allow them to focus on the uncertainties with positive impacts,” he continued.  “By having the right protections and insurance in place, Australians have one less thing to worry about and can feel more confident to focus on their other ambitions in life.”