But many still can’t tell an indie insurance agent from a captive agent. A new report suggests that insurance and risk management are playing increasingly significant roles in financial planning. Nearly 60% of the 102 financial planners who took the survey said that they used their clients’ property or casualty insurance to evaluate their asset protection. A similar survey conducted in 1998 threw up the lower rate of 40%.

The apparent increase in awareness about insurance among financial planners is good news to the Chubb Group, which sponsored both surveys. “People, especially affluent individuals and families, are facing a larger variety of more acute risks today stemming from litigation, new technology, globalization and other societal changes,” says Eric Pruss, head of marketing for Chubb’s personal insurance business “A financial plan that does not include property [and] casualty insurance and risk management potentially leaves a client's entire asset base at risk.”

Weak referrals

Despite the increased importance of property and casualty insurance, it still accounts for only about 3% of revenue for financial planners, according to the survey. The largest biggest chunk of their sales came from investment planning (49%), retirement planning (16%), life insurance (11.5%) and estate planning (10%).

The survey suggests that life insurance was the most important of all risk-related planning areas, followed by personal liability exposure, property protection and personal and family insurance.

Just over a third of the planners who participated in the survey are licensed to sell life insurance, but only 9% have property-and-casualty licenses. Nearly half of them say they have referral relationships with independent insurance agents, but only 8% view such agreements as significant sources of new business – compared with 65% who said as much about estate attorneys, and 59% who view referrals from tax professionals as a major sources of new business.

“We were surprised to find so many planners indicating that they had a relationship with an independent insurance agent,” says Pruss. But he adds that many others seem to be mistaking independent agents, who have access to products from several insurers, for captive insurance agents, who represent specific insurance-product makers.

“Many financial planning clients likely need the broader products and services provided through the independent agency channel,” says Pruss. “Planners and their clients should take a closer look at whether existing agent relationships provide coverage and services in line with the assets at risk.” –FWR

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