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Life Assurance
Sunday, January 1, 1989
Valued role

Banks and building societies traditionally spend a far greater proportion of their budgets on advertising than their competitors, the life assurance offices. Life companies instead tend to invest in human resources: their agents and broker consultants, to bring in new business.
The building societies and banks insist that while they spend a lot of money and energy on increasing business, the life companies don’t have to put in the same effort. In other words the assurance industry has gained something of a ‘fat cat’ image.
Advertising expenditure by banks amounted to about R32rn in 1987, by building societies R20m, while life offices spent just under R 1 3m for the same period. The assurance industry does not have as big an advertising budget as the banks and building societies. This is because the life assurance products are sold in face-to-face transactions.
Peter McKelvey, deputy GM agency for Liberty Life, adds, “Advertising, which has the ability to create an awareness of various companies, does not necessarily provide the personal incentive to justify the immediate need, or qualify the necessity.”
Most business therefore arises from the work of the agents and brokers. New business obtained by these life intermediaries in 1987 comprised 61% and 39% of total sales respectively. This indicates the important part they play in the industry. The brokers and agents actively go into the markets and get business. Sales of products do not easily pass their way. Further, the personal element of the agent or broker in dealing with a client must be stressed.
The life companies realise the importance of these salesmen and women and therefore spend money on people development as well as advertising. Investing in human resources involves the correct recruitment, development and training of people.
The development of the human investment passes through a number of phases. The initial process involves screening of prospective agents. Certain criteria are expected. Factors such as work history, financial history, education and interpersonal skills are examined. For example, a sound education would ensure that an agent would be able to analyse the needs of a client effectively.
On acceptance, a consultant undergoes in-house development and training on the sales cycle. This is known as the ‘survival kit’. It deals with fundamental skills needed in telephoning, analysis and presentation of a product with special emphasis on service.
The agents also learn about the methodology of the sale. This is the process of dealing with a prospective client. A typical agent’s development programme can take up to four years. On completion the agent would be well versed and competent in selling skills, as well as the technical skills required of him.
Mr McKelvey says, “The life assurance consultant is a very special person. I say this because there are many aspects of the career that are little understood. Seldom is a consultant recognised for being an individual of real ability. Within the infrastructure of the life assurance industry they are the elite troops: these people who are prepared to do what others will not even attempt.
“They provide their clients with a service that has consistently proved to be the only financial life line the family or business has.”

Copyright © Insurance Times and Investments® Vol:2.1 1st January, 1989
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