Cash Flow, Insurance, and the Cost of “If Only” | Nick Hau, Moneta Insurance

Introduction to Go Beyond Busy

[00:00:00] Bernard: Welcome to Go Beyond Busy, the podcast for business owners who want more clarity, better decisions, and a business that supports real life, not the other way around.

Christine Abela is joined in this episode by Nick Hau from Moneta Insurance, based in Christchurch. Nick works closely with business owners and families, helping them think through the financial impact of illness, injury, or unexpected events.

If planning for the “what if” has been sitting on your to-do list for a while, this episode offers some grounded insights from someone who sees the consequences every day.

Meet Nick Hau from Moneta Insurance

[00:00:10] Christine Abela: Hi, I’m Christine from Go Beyond Busy. I’m here today with Nick Hau who works in insurance. He is with a company called Moneta Insurance, and he’s based in Christchurch in New Zealand.

How are you today, Nick?

[00:00:50] Nick Hau: I am great, Christine. It’s great to be here. Thank you for the invite.

The Importance of Cash Flow in Business

[00:00:54] Christine Abela: You are welcome. And tell me, Nick, you know the question, what’s something that you’ve learned about running a business that you wish you’d known earlier?

[00:01:03] Nick Hau: Wow. That’s a really good question. And there’s probably lots of things that you come across on your journey and learning, isn’t it, once you’re in business. And probably one thing that sticks out is probably the importance of cash flow. We are financial advisors, so we were well prepared getting into this when we went out on our own and, buying some established established revenues. So we’d planned out from an annual perspective of where money was coming in and where we thought that money could go out. We learned probably a few years in the importance of being a little more detailed on the ongoing cashflow. So we had a couple of surprises and probably just again, just learning the importance of cashflow is king.

[00:01:45] Christine Abela: How did you learn that? Was it just the school of hard knocks, or what did you do?

[00:01:52] Nick Hau: Yeah I guess you’re probably right there in terms of school of hard knocks, but as I say, there was a bit of a surprise in terms of where our cashflow was and where we thought it was going to be, which made me go back and cashflow out for, oh, we ended up cashflowing out for probably a good four or five years ahead. And weekly cash flows. So we could see as our revenue was coming in and our expenses going out on a weekly basis what that looks like. And now we probably fortnightly or sometimes even weekly update those figures. So we have avoided the surprises we had earlier. And it’s been a godsend, in terms of that process and putting it in place. Yeah it’s absolutely been a godsend a for us.

[00:02:35] Christine Abela: Was that for the insurance business or was that for something else?

[00:02:39] Nick Hau: Yeah, the insurance business. Yeah. So as I say we’ve got ongoing incomes from our revenue streams of renewal income and commission. But at the same time, we’ve got a lot of debt from buying our businesses, um, throughout the years. So was important to understand when the money comes in, and when it doesn’t come in. As I say, it’s always fine to look at an annual period of time of the money we expect to come in, but it doesn’t always come in divided by 52 weeks. It really does come with peaks and troughs in terms of when that money arrives. we’ve learned some lessons in understanding those trends a lot more as well.

So we know back end of the month, a higher revenue period than the beginning of the month. And we know there’s a couple of weeks in the middle of the month too, where we have a bit of a peak. So it gives us a far better understanding of our cash flow, where we sit at any given point of what’s available money and what isn’t available money, based on our ongoing expenses as well. And it’s been great for us in terms of making decisions on pay rises, in terms of shareholder distributions. Extra money at Christmas time so we can’t have a break. That’s just been a good learning curve, being prepared for our provisional tax, all of that, GST. It’s just, as I say, that’s down to incoming amount of money and every outgoing that’s expanded, I suppose as time’s gone on as well, to make us make much better financial decisions on what we invest in and what we don’t.

Understanding Moneta Insurance Services

[00:04:14] Christine Abela: Tell me about your business, Moneta Insurance. What do you do? Obviously insurance, but tell me more about that.

[00:04:22] Nick Hau: Yeah, so personal insurance, and by that insurance for people. So that’s your life, your health, income, uh, and trauma insurances and looking at personal situations at home. What impacts there will be if something was to happen to their health or their income. And then business owners as well as to how that may affect their business. Ongoing revenue, buyouts, debt repayment. That all flows on to how it affects your home as well from a cash flow point of view. So it, it’s just having conversations with people, what their situations are, what their risks are. And dealing with the two words we use a lot, which is the what if.

The Value of Planning for ‘What If’ Scenarios

[00:05:06] Christine Abela: Tell me, you and I we’re in the same BNI chapter and you have a really good tagline that you use. Tell me what that tagline is.

[00:05:14] Nick Hau: Yes, we are Christine. I always wrap up my 60 seconds or 10 minute presentations with “It’s far better to plan for the what if than be left with the if only”.

[00:05:23] Christine Abela: Expand on that.

[00:05:25] Nick Hau: What we find is people don’t know what they don’t know. And a lot of times when it comes to financial decisions or your health and the impact of your health on your ability to work and what it means when you don’t work and income stops coming in, people don’t understand what the ramifications or the consequences of that looks like until it actually happens. Or they happen to spend some time with someone like me, an advisor, asking those questions and asking the what ifs. And thinking ahead, what if this does happen, what if that What does it look And ideally, what would you want it to look like if it did happen? And therefore we can put a bit of a plan in place so least financially the burdens can be a little bit less and they can get through that recovery. And hopefully get back on a better level pegging in terms of their financial situation.

[00:06:18] Christine Abela: Have you got a story of an example of where a business owner got insurance through you and then went, oh, thank goodness for that.

[00:06:27] Nick Hau: Yeah, with many claims which is nice to see that the, this stuff works and as it’s a privilege to help people in that situation, it does happen. I’d much prefer that it’s all a waste of money and they never claim at all. But unfortunately it does happen. But as I say, it’s a nice experience to see when the rubber hits the road of this stuff actually working.

And, a particular business is where, there’s multiple owners in the business. It was a trade type of business that enabled the shareholders to have the funds so they could buy each other out when one of them died and passed away. And just to show the, I guess, the unfairness of the world, I guess this happened three times in this business where owners lost their lives and insurance was the funding mechanism to pay out. The life insurance enabled the shares to be handed over to the surviving owner. But as I say, just heartbreaking, that one business experienced it three times with three of those owners. So for us, I guess this is an incredible story that it was there to help multiple times, but at the same time, heartbreaking story of a business needing it three times. So yeah that can be a great example of the work and thank goodness it was there for them and their families.

[00:07:55] Christine Abela: So you said you do health insurance among the different kinds of insurance you do. Why would somebody want to go to a broker rather than just go directly to a health insurance company?

Why Use a Broker for Insurance?

[00:08:07] Nick Hau: Yeah. And I think that’s a great question ’cause it’s a great question the industry is considering when it comes to AI as well. And for us it comes back to that personal touch. Having a person to talk to. Having someone with the knowledge to know the devil in the detail. ‘Cause when it comes to insurance policies, they’re contracts. And the devil’s in the detail of the process, the importance of underwriting and ensuring you have disclosed as much as you possibly can so that you can have a smooth and confident sound payout when it comes to claim time. But again, I mentioned earlier you don’t know what you don’t know. And dealing with a professional who the differences, knows the ins and outs, the importance of the contracts, knows the differences between contracts, between companies. They can steer you and give you some advice as to what’s gonna be best for your situation. There can be over 25,000 scenarios of insurance policies when you decide to add particular add-ons, or not. And so again, knowing depending on your situation, which add-ons will be relevant or useful in your situation, which aren’t. That’s the role of an advisor is to guide people through that decision making process. And putting that plan in place that’s right for them from a claim point of view, but at the same time their budget and their stage in life.

[00:09:38] Christine Abela: And when it comes to actually making a claim, is it better if you’ve got a broker or you still just go to the company?

[00:09:44] Nick Hau: A hundred percent. Our job is that middle person to again, make the claim be the best outcome that it possibly can. We are on the side of our clients and if need be, we’ll go into fight against the Insurance company. That doesn’t happen often at all. We have great relationships with our suppliers and insurers, and there’s some fantastic outcomes. Every now and then, we can just provide a little bit extra context and provide another set of eyes to look at something a little bit differently. And that might be the difference of having that claim payed or not. Also knowing what the insurance company needs and wants to see. Knowing that the contract and the wording and the policy wording, what we can guide people at claim time. And, as I say, it sounds a bit morbid, but it is the best part of the job when we get to help people at claim time. Help them with the paperwork, make it as comfortable, as easy as possible for them in a really trying and upsetting time. We can help with the paperwork, helping them knowing the documentation that’s required, explaining the scenario, why we need these certain things. Helping clients explain and answer questions in the right way so the insurer gets what they want as quickly as possible, and ultimately we can get their claim paid out as quickly as possible. That’s our job, which is great.

[00:11:06] Christine Abela: Do you do things like house insurance and car insurance and that kind of thing?

[00:11:12] Nick Hau: No. We don’t do any assets or commercial insurance. Just funnily enough, we’ve just entered into a contract for some travel insurance that’s now on the table. But otherwise, yeah, just your people insurance and the life, health, income.

Conclusion and Contact Information

[00:11:23] Christine Abela: Thanks very much, Nick. It’s been great talking with you. If anybody listening to this would like to have a chat with Nick, I’ll put Nick’s contact details under the podcast or wherever it is that you’re listening to or watching this.

And if anybody wants to have a chat with me about their business and business strategy, then reach out for free business strategy session. Thank you very much, Nick.

[00:11:44] Nick Hau: Thank you Christine, and good to talk to you again.

[00:11:47] Bernard: That was Nick Hau from Moneta Insurance, sharing his experience of working with business owners and helping them prepare for the unexpected.

If this conversation raised questions about your own situation, Nick’s contact details are included with this episode if you would like to continue the conversation with him.

If listening to this episode has also highlighted gaps in your business planning, cash flow visibility, or decision-making, Christine offers a free business strategy session. Go to GoBeyondBusy.com to book a time.

Thanks for listening to Go Beyond Busy. New episodes are released regularly, featuring practical conversations with business owners and advisors who have been through it themselves.