David, can you outline Zurich Life’s strategy in the Irish market and how Financial brokers fit into that?
Thank you Diarmuid. Zurich had a very strong 2017 and the support of Financial Brokers was a major factor in making it such a successful year. Of the three biggest players in the Life market, Zurich is the only one without a bank distribution arrangement, so we’re 100% behind Financial Brokers as the best place for customers to go to for financial advice.
I recently met with our team of Broker Consultants – your main point of contact with Zurich – and I can tell you that they are as enthusiastic and committed as I am to supporting financial brokers in 2018. I’m particularly keen to have a strong start to the year and that’s why we held our quick-start ‘Connecting for Growth’ events for Financial Brokers in Dublin, Cork, Galway and Limerick. It was great to meet with our brokers and start the discussion early in the year about the challenges and opportunities for growth; and what we can do together for customers this year.
The outlook for 2018 looks positive, with the economy growing strongly and employment levels continuing to rise and that should continue to underpin a growing market with increased opportunities for Financial Brokers as a result.
As a market leader and the number one supporter of Financial Brokers today, our focus is on continuing to give you innovative product and fund choices while making it easier to do business with us.
What do you see as the needs of our customers today?
Customers’ needs are constantly evolving and they rightly expect their Insurer and Financial Broker to be responsive to their needs and make it easy for them to carry out their business with us.
Innovation is very important in the market today and by innovation, I mean listening to Financial Brokers and customers to understand their needs and being the first in the market to deliver on these needs.
We’ve listened carefully to what Financial Brokers and customers want around life, serious illness and mortgage protection. We understand value for money is key and that’s why we’ve got a number of market leading options available on our Mortgage Protection and Guaranteed Term Protection products. We know you want agility from Insurers and a good example is that we immediately pay beneficiaries to cover funeral expenses, where a valid claim has been made. We’ve recently enhanced out illness definitions and Zurich was the first Insurer in the market to cover diabetes type 1 under a serious illness plan.
We are committed to being flexible to meet customers’ needs and work with you to understand how best to deliver on those needs.
Robo-advisers are mentioned as a potential threat to Financial Brokers. What is the Zurich view of this and how will Zurich use technology to support the broker market?
I take a more optimistic view and see technology advancements representing more of an opportunity than a threat for Financial Brokers. For example, our investments in new technologies at Zurich have consistently been about improving the advice process for Financial Brokers and thereby making it easier for Financial Brokers to do business with their customers. Our online risk profiler is a good example where we use algorithms to help select funds suited to an individual’s risk and return profile faster and more streamlined, however Financial Brokers can use this information to then have a discussion with the customer as they have the relationship with them and understand their circumstances. So, while technology will help in decision processes, there will always be a place for face to face advice when it comes to people making financial decisions that will influence their own and their family’s future.
With customers increasingly looking for a faster and more streamlined online service, we are investing in enhancing our systems and processes to make Financial Brokers’ lives easier and we recently rolled out a number of enhancements to make for a faster and smoother online customer journey for protection customers. Again we’re using the latest technology with a focus on faster service to meet your needs and those of your customer. With new features such as straight through processing for cases where no additional underwriting is required and the facility for brokers to upload documents directly on to our systems, we expect that brokers writing protection business have already seen the benefits of this new improved system.
Financial Brokers are ideally placed to help these people understand how they can access better returns for their savings. An advisor can give customers a clear understanding of risk and return, provide advice around fund choice using their knowledge of the customer’s requirements and give them the comfort that the advice they are getting is individually suited to their needs.
Investment markets have had a good run in 2017, what role do Financial Brokers play in advising customers in the current climate?
While markets have performed well and consumer confidence has improved, our experience is that many people are reluctant to move away from deposit accounts. And according to the European Central Bank, Irish savers are paid some of the lowest interest rates on deposits across all 18 Eurozone countries; despite this, there are still billions sitting in deposit accounts earning virtually no interest.
Financial Brokers are ideally placed to help these people understand how they can access better returns for their savings. An advisor can give customers a clear understanding of risk and return, provide advice around fund choice using their knowledge of the customer’s requirements and give them the comfort that the advice they are getting is individually suited to their needs.
We’ve looked to make it as easy as possible for you to advise customers on what is best suited to their needs. We were early adopters of the ESMA risk scale across our Prisma fund range so that customers can choose their level of risk and potential return; and our Easy Access Investment and Savings products are good examples of where we’ve provided solutions that tackle the obstacles stopping people taking out savings and investment policies.
We understand of course that to recommend Zurich, you need us to keep delivering leading investment performance and reports from Rubicon showed that, in 2017 Zurich had a twenty year average return of 6.3% at the end of 2017, which demonstrates that investment excellence is an area where we deliver results for savers and investors.
With auto-enrolment due for introduction in the coming years, what way do you see this shaping up in the market and what role will brokers have to play?
We have been a supporter of the introduction of auto-enrolment over a number of years, so An Taoiseach Leo Varadker’s announcement last year that the first ‘auto-enrolment’ contributions were expected to be in 2021 was very welcome.
While auto-enrolment is likely to result in increased volumes of business, it is difficult to predict what way the system will be implemented. Auto-enrolment is an opportunity rather than a threat to financial brokers as it will extend cover into new areas of the market and open up opportunities for Financial Brokers to help employers prepare for the changes and to guide employees when the auto-enrolment process starts.
I believe that sound advice needs to be an essential part of the process.
There is a huge amount of regulatory change happening in 2018, with the introduction of Key Information Documents under the PRIIPS regulations, GDPR and the Insurance Distribution Directive. With all these challenges, what does the future look like for Financial Brokers?
Financial Brokers are thriving at the moment, and are winning over customers who previously dealt with their local bank branch. The personal and local service provided by Financial Brokers cannot be matched by anyone else. So, while regulatory change will bring some challenges, I have no doubt that Financial Brokers will overcome those challenges, and will continue to thrive.
In the light of regulatory changes in the market, how can we ensure a vibrant financial broker market with new entrants to the industry?
It is really important that we have new Financial Brokers coming into the market, as older brokers retire, and to meet the needs of a growing population. I think providers like ourselves will need to work closely with Brokers Ireland to make more people aware of the great opportunities in the Financial Broker market. While there are challenges, I believe it is a rewarding and exciting career path and we need to get that message across.
Finally David, what are your future ambitions for the business?
A key focus as Managing Director is to make it compelling for Financial Brokers to partner with Zurich to meet their customers’ needs. And I’m confident we have a lot to offer – our in-house investment team actively manages over €20billion worth of funds for customers with an excellent performance track record. We’re part of a very strong global group rated AA- (stable) for financial strength by Standard & Poor’s.
In Ireland we’ve a strong committed team dedicated to innovation and delivering for Financial Brokers and I want to again thank members of Brokers Ireland for their support which led to Zurich picking up four out of the five awards on the night at the most recent Brokers Ireland Excellence awards.
We have a long history of working together with Financial Brokers and their representative bodies to promote brokers as the best source of independent advice for consumers. With the support of our talented and hard-working employees, I am committed to continually enhancing the support and service we provide, in today’s competitive and ever changing marketplace.
