tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Monday, November 4th, 8:01PM

Insurance

rss
Latest Headlines

Fidelity Life taking a different approach to tax increases

Fidelity Life says its response to life insurance tax policy changes is partly to alter its commission structure to a renewal model, rather than one with high up front commissions.

Wednesday, May 26th 2010, 10:24PM

by Jenha White

Its yearly renewable term life premiums are projected to increase by 2.5% a year for the next five years which will make a compound increase of 15% by 2015.

Fidelity Life chief executive Milton Jennings says other companies have tended to hit all the increases up-front, whereas it is trying to spread the effect.

"We have done a lot of modeling on future profits and we felt this way was best, we talked to advisers and got feedback and they felt a small step approach would be better than a big increase."

It is also projecting that it will increase level term rates by 20% from July 1.

Jennings says Fidelity Life has been waiting for quite a while to see how other companies would tackle the tax increases, and once it knows what its competition is doing, it may reassess its situation as it needs to stay competitive.

It also announced last November that it was moving away from the battle to offer the highest upfront commissions on life insurance sales to a renewal commission model.

Jennings told Good Returns that "it's the way of the future, building a sustainable model stream to make business strong. It's good for clients and customer service - it reduces the churn factor".

Its Platinum Plus Plan has a range of options for advisers who can choose from anywhere between a 124% upfront and 16.2% renewal commission to 31% upfront and 34.8% renewal commission.

Jennings says over the medium to long term the renewal model is better for advisers, however when an adviser switches it will take about three years until the model produces higher income.

"We believe the market needs to move to a renewal model, we just think it is the right way to go."

Jenha is a TPL staff reporter. jenha@tarawera.co.nz

« Asteron premiums to increase 7.5%Time running out for life companies to announce premium increases »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
Insurance Briefs

nib launches tool to support women through menopause
nib has launched a new health management programme designed to support women as they navigate the stages of perimenopause and menopause.

Employees are wanting health and life insurance
A new survey shows potential employees what life and health insurance benefits, but less than a third of employers plan to offer such benefits.

Chubb Life makes changes to trauma benefit
Chubb Life has made a series of enhancements to its Assurance Extra and Assurance Extra Business policies, including the addition of a new Continuous Trauma Benefit,

Resolution Life gets new president
Global life insurance group Resolution Life has appointed Moses Ojeisekhoba as its new President.

News Bites
Latest Comments
Subscribe Now

Cover Notes - Specific news aimed at risk advisers

Previous News
Most Commented On
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com
x