Partners Life rejects restructure scepticism

I guess Naomi has to defend their position, or at least the one adopted so far. But I'm still calling it window dressing.

While some comments on this topic so far have been a bit tougher than necessary, perhaps the opinion that matters most in the near future is the RBNZ Reinsurance Funding review.

I hope Partners does get through all this, for the sake of our industry. It would be a shame to see a start-up fall, and to think that innovation and new competition, in a shrinking supplier market, would be stifled. I look forward to supporting them; when they have credible ownership, a strong balance sheet and a track record of stability and reliability both on price and claims.

Dirty Harry - you have put my thoughts and feelings in a nut shell (so to speak).
Only comment I would add is "watch this space" especially in relation to the RBNZ Reinsurance Funding review.....

Everyone should read the RBNZ Guideline titled "Carrying on business in a prudent manner" - while only a guideline for insurers it should be a wakeup call for smaller start-up insurers such as Partners Life. Section 13 is quite clear - Human resourcing relates to the ability of an insurer to meet its commitments with appropriate numbers of staff who have the requisite background, training and experience.

Losing this number of staff, with these skills surely must be a worry to all.

I have until now refrained from commenting on this site, which I often find can be a little harsh at times.

However I find myself having to agree with previous comments - I have never used P/L but have not been overly concerned with their presence in the market. Surely now though, with the news of the loss of roles after such a short start up time must be a concern to the various regulatory bodies (FMA/RBNZ), not to mention the IPSA coming into play later in the year.

I agree with Lloyd - this must be a worry for those concerned (staff, advisers and clients alike).

Insurance in NZ has become a closed market and damn near impossible for any new participants to enter. Without our support PartnersLife will never survive; neither would have start-up Sovereign or Club Life in their early days. I have supported all three of these companies and look how well they have done! I remember the same abuse back in the early Sov days for my industry peers. Looking at Naomi’s track record I think it is easy to say that she knows what she is doing. I trust her and I see no reason here to think otherwise.

I find it interesting to see that those above are waiting to see “claims experiences”. I have had some absolutely terrible experiences with “AA” rated companies lately, so for me this too is a moot point. At the end of the day, I am happy with Partners Life policy wordings, so are the independent research houses.

Look forward to seeing other supporters in Hawaii soon.

Well said Albert E.

Albert E & Amused, hope you enjoy Hawaii while 8 (ex Partners Life) staff look for work. A truly insensitive comment to make. Shame on you.

I agree with Amused and Albert E....we have seen all this before it is always the way with a start up in this industry and for some reason some people in this industry really do like to have a bash at Naomi at every chance. Perhaps they should spend less time posting comments and more time reading policy wording and doing the right job by their clients!

I find it very interesting that all those publicly supporting Partner's Life and Naomi Ballentyne are those that have churned business for great commission and rewards (Hawaii) - I'd be interested to know how many of them have their own personal policies placed with them, and for how long...

Surely if Partners was in trouble, AM Best would have picked this up prior to confirming their financial stability on March 27??? Has anyone (Partners supporters or not) bothered to pick up the phone to get the background on the redundancies before shooting from the hip with their comments, I think you'll find the situation is more than stable and makes a lot of sense.

I have to say Lloyd, I couldn't agree with you more. How nice of you Albert E to put your tropical holiday ahead of hard working staff who lost their jobs. It really shows the true colours of the company and where their priorities lie.

OK this really is starting to look like an orchestrated attack from disgruntled competitors now! How about we get back to work ah?

@Albert E....when Naomi sells up and starts another one you can churn yet again for those pathetic trips!!I can really picture the type of broker you are....what a shame.

What if these problems become terminal ? What will reinsurer do to handle claims/client queries and all the other things an insurer does if PL cannot pass upcoming Reserve Bank requirements or if re-insurer refuses to accept any more new business from PL ? PL supporters all live in hope that someone will buy them. If you were at the recent Planet conference the CEO of one insurer did an excellent presentation on the financial issues insurers now face. There does not appear to be desire from insurers to buy another insurer in the market place at present. There was no long list of buyers for the Tower risk book. PL in 5 years time will be considered for my clients but not now. The old adage that where there is smoke there is fire rings in my ears right now. I am not prepared to risk my reputation or the value I have established in my reputation for "better wordings now" or "higher commission" now. Good luck to PL on surviving this problem as the industry does not need any more negatives .

I recently had a personal major medical claim pre-approved by Partners and was thrilled with the service. I am grateful for the innovation that the Partners Life founders have brought to the industry over the last 25 years and feel that the nation is much better off because of their contribution. Letting staff go is difficult but sometimes just has to be done. Clearly, in this case, it was a considered move and only happened reluctantly after careful analysis over a period of time. All the hallmarks of a caring and considerate employer.

Lloyd - I am with you on this one - comments that not simply appropriate at this time.

I cannot believe that folks can be defending the loss of eight roles and then in the same breath give back slaps for a trip to Hawaii.

I trust the beach drinks and the crayfish taste swell.

Enjoy - while you can.

Fonterra just laid off 200 staff and their share price went up - just because a company lays off a few staff it doesn't mean it's crashing and burning. Also I think you'll find most of the life insurers offer trips as incentives to advisers so what's the point some people are trying to make here?

PARTNERSLIFE, shine in my eyes with their product, their fantastic underwriters, who are all very personable, and their back office people, but even more importantly, they paid a huge claim recently to a client, who did not feel they needed to disclose a lump on HER breast, as her Mammogram was clear apart from lumps, which they were going to check on when next one was due.... The women and her husband have 4 children, and they were about to sell her house, PARTNERSLIFE PAID THE CLAIM WITHOUT QUESTION..... My client had a double Mastectomy. Its turned their lives upside down financially, they wouldn't have survived without PARTNERSLIFE. My client is still going through hell healthwise...

Thanks for the common sense observations, Top Gun. It is beyond me, too, what has driven a few to make such venomous remarks. To all those "My s**t doesn't stink!" critics - don't worry. When you finally realise that Partners is here to stay and your clients are asking why you haven't upgraded their cover yet, Partners will still give you an agency.

Lloyd & Peter T - it is admirable that you feel so moved to defend the employees recently let go. Do you have some evidence that they were unjustifiably dismissed, or that PL didn't follow the required processes? do you personally know one or more of them? If the answer to all these questions is 'No', then, respectfully, what business is it of yours anyway?

Top Gun - to compare P/L with Fonterra I would suggest it a bit of an embellishment.

One is a publicly listed organisation with exports worth almost $20 billion annually. The other is not.

And yes, other insurers do offer various incentives and offshore trips, however they are not the subject of all the commentary here - I wonder why?

I'm a little bemused at the focus of the vitriol being poured upon PL, as the real issue here is not their capitalisation in respects to meeting contingent liabilities like paying claims.. that is all covered by reserves, reinsurance and sound business principals that all Insurers must meet.
The real issue here is the huge front end loaded expense of acquiring new business. Its a double edged sword - a key driver of success is New Business written, but this New Business comes with a huge upfront cost and new policies typically wont break even for 6 years. Its not rocket science, a Life Policy with a premium of $100 pm is only bringing in $100 per month of cash flow/revenue for the Insurer but the Insurer has to pay out direct costs of upwards of 200% (in most cases) in direct Commissions,over rides and soft dollar expenses to keep advisers "happy" and cover the fixed overheads of staff to put this cover on the books... all this from $100 which will start drip feeding in next month!
These expenses therefore need to be met out of Working Capital so if you want to be a successful start up and grow your business, you need to find more capital to fund these acquisition costs or look for efficiency gains (a euphemism for job losses). As I see it Partners is a victim of its own success.
If the industry truly wants more choice and more start ups offering competitive products at reasonable prices (for the consumer) they need to look at themselves and ask "Is receiving 150% - 200% in up front commission a viable sustainable model for NZ when the rest of the developed world has moved the other way?". (and please no bleating about NZ's "under-insurance" problem... huge upfront commissions have not solved this in NZ over the last 50 years and evidence offshore suggests there is no correlation with huge adviser commissions and organic market growth ... in fact some studies show a direct negative correlation - higher up front commissions lead to lower organic growth rates - the pot doesn't get bigger but plenty of New Business gets generated and plenty of commissions get paid.. the uninsured remain uninsured and the Insured simply get a new Insurer every 3 years as Brokers "review" their existing clients...

Perhaps some of you should read the book "Reality is Crazy" the story of the beginning of Sovereign.....it seems to me "Reality is Crazy" and the same people are flinging the same muck they were 15 years ago....and 11 years ago when Club Life set up and now again with Partners......bottom line is the track record shows success and you are all saying the same things you have been saying for the last 15 years! It is boring!!! If we are writing Partners because it is the best thing for the client our clients are safe because they have guaranteed wording and no matter what, they are re-insured and if Partners didn't survive which is unlikely, the re-insurers will hold the cover and no doubt one of the other companies will buy the book of business. Get real and stop creating drama in an industry where we actually need to grow some integrity amongst the adviser force!

It amazes me how certain ones writing here take so much pleasure in knocking PL as a company as well as Naomi who both now and in the past so successfully raised the bar with prudent leadership and innovative thinking from both early Sovereign days and subsequently Ing which I am sure that these knockers too are probably now benefiting from.

I am pleased that prudent management of staffing is a considered method of financial management at PL as it is to any business.

As to the continuous pathetic reference to churning, wasn't it only a few years back that Sovereign were blatantly offering transfer terms attempting to take advantage of the perceived demise of then, AIG. I am sure that when Sovereign or ING started there wasn't a massive influx of uninsured public, it was advisers making recommendations they deemed as appropriate for their clients new or existing, what has changed?

I look forward to dealing with PL where from their people, market performance and product ratings may be sooner than I had considered.

Surely this is pretty clear to understand, whether concerned with commissions or anything else. P/L had a huge influx of work for the last couple of years which needed a higher level of staff, this has balanced out now and those staff are not needed. I would rather that P/L hire staff when there is too much work than to have to wait months like other companies to get stuff underwritten. To me Naomi and her team have just made good business decisions. Now back to work.

Tina Jarvis - "If we are writing Partners because it is the best thing for the client our clients are safe because they have guaranteed wording and no matter what, they are re-insured and if Partners didn't survive which is unlikely, the re-insurers will hold the cover and no doubt one of the other companies will buy the book of business".

Are you serious, who will buy them?

They are re-insured so the clients will be safe - crikey - I hope the clients of P/L can speak fluent French.

Tina - I think you will find there is no reinsurance on their health book - hence the problem they now have on their hands.

Perhaps a little homework could be in order before adding your ten cents worth.

I've been a Partners supporter from day one, I moved my entire book because they gave better terms for my clients. Is that a bad thing? Just because I earnt high commission again, so what, I worked hard to transfer these clients. If another insurer comes to market with better terms than Partners I will do it again. That is my job as a broker. Get over it people.

The PL situation is a worry. Should I move all my PL health clients to another company for better long term security? It would need to be a company with upfront commission as I need to keep up the payments on the Bentley.

Vinnie, I think you will find no one has reinsurance on their health book and Paul, the re-insurers have offices all over the world and unlike the Kiwis who speak few other languages you will find most Europeans speak English!
Apart from which I speak German and French so my clients will be just fine!I am shocked at how petty you are all on this site. I have not commented before today and won't again but have today because I really think this is beyond a joke, it is like the school playground and if you want my opinion there are too many brokers/agents out there with many years in the industry but one years experience over and over again...get with the real world skill up and do your jobs and stop wasting time fighting like children!

@partnering...wow your whole book...all of your business clean skins......amazing...!!!!

Interesting comments .... I think Tui could make something from this ... if only the public understood.
You've gotta love "Partnering" .... it's all for the benefit of the client ...Yeah Right!!!!
The concept of learning French or German appeals ... not only could we speak to the reinsurers, but we could order the new Merc too .... ha ha ha...
If only you guys were not so (*&%$ it might be funny!!!

Partnering. I hope for your sake you are posting your comments via several hard to find foreign servers. If not I would expect the FMA to track you down very quickly and do what they should be doing and close you down. We don't need the likes of you in our business. You might consider just asking for a one way ticket to Hawaii.

A few observations if I may;
to Mike - all swords are double-edged, otherwise they ain't swords. The new business strain has traditionally been relieved by first year rebate from the reinsurer, and/or by forgiving lapses for a period until the start-up is established. The Reserve Bank is querying the recognition of these arrangements in the financial statements of life insurers. All life insurance companines which have reinsurance financing arrangements are likley to have to adjust their capital structures, if the Reserve Bank take the view that such arrangements are debt/loans and should be recorded as such on the Balance Sheet.

to Tina - I was one of the characters featured in "Reality is Crazy" and while I have some issues with a few of the messages in the book, the overall analysis is on the money. However, please note that there is no contract between the policyholder and the reinsurer, and certainly no obligation on the reinsurer's part to maintain policies in-force if a writing insurance company ceases to be able to meet its obligations.

to All - nobody wants Partners to fail, or shouldn't if there's any common sense out there. The fact that most rival insurers have been caught napping by Partners is not Partners problem!

Ad hominem attacks on Partner's management are inappropriate and ill-considered, and if the competition refuse to retain sufficient creative talent to be able to mount an effective response to Partner's arrival in the market - tough bananas!

Ron, 'Partnering's' whole book might be 5 family members, 3 friends and 18 tombstones.

Ron -let's hope that the FMA do track down "Partnering" and deal to him. The FMA have some firm views on this sort of activity . It's just a pity they are not resourcing this sort of investigative activity. Maybe Mr Hughes can shed some light as to why!

Mike - you also make a very valid point - it's the high upfront commissions associated with the "new player" and guess what that's how they build their book. The other market players are then forced to match them or lose market share which does nothing to improve the affordability of life cover. For a population of about 5 million we have more than enough providers and product.

This is my 22rd year in the industry. It is not, in my view, ONLY the high up-front commission that has attracted the growth to PL.It must surely be acknowledged by any reasonably open-minded industry participant that PL has cleaned the clock of the established market in the area that is rightly the main concern of brokers - benefits. In both definitions and price, it is making many companies pips squeak.

The older established issuers are supported by brokers who may be operating out of habit (an old NML tied adviser is a broker but seems to put most of the new business to AXA/AMP. How is that defensible?).

A start-up like PL is reliant on being BETTER than the others. Being somewhat cautious (despite the Sovereign & Club?ING experience) I waited almost 18 months before deciding to start including PL products in my recommendations. Since then my PL experience in admin, communications & claims has been outstanding. Unless there's a blindsiding event, I can't see PL doing anything but going from strength to strength. The RB review (and yes, I have read then Discussion Paper - have you? http://www.rbnz.govt.nz/finstab/insurance/5061333.pdf ) does not threaten too darkly.

So, good on you Naomi, Chris & Richard, and thank you.

Mike above states that we are paid too much (something I do not necessarily disagree with), however according to him it takes another 4 years premiums for the Insurer to get to break even. Surely that must mean there are a LOT of expenses that the Insurers as a whole could trim as well?? Churn must surely add to this cost as well, and I would suggest that pretending to look the other way whilst it occurs does not make the Insurer any less culpable.


I have heard some truly disturbing tales over the last couple of years about wholesale churning of business; and the excuses I have heard from some Brokers/Agents have been pathetic to say the least. I have rescued more than one of my clients from people supposedly "getting better terms for their clients" (thanks 'Partnering'). One reasonably recent case was the other Insurer could offer "Own Occupation" instead of "Any" as on the existing TPD contract; that meant the Disability, Trauma, Life etc was all to be "churned" on this excuse as well. It took about 10 hours of my time to go over all the reasons we had put the cover in place and to rescue the case, I was, and still am not, happy about it.

Insurance Companies accepting this "new" business cannot take this business and claim that the consequences of this churning has nothing to do with them. They are helping to create a larger problem for the Industry as a whole; the thing that concerns me though is how many of the Chief Executives of these companies will be around in 3 or 5 years time?

As for "Partnering" above it is as well you used a nom de plume, likely the only sensible thing you have done in the last few years. You go and ask any underwriter or any claims person the biggest problems they have, a large majority are going to at least mention non disclosure. Whether that is intentional or non intentional non disclosure is irrelevant. I think you may find "Partnering" that even your PI Insurer is not going to be very supportive if they find you have done whole scale CHURNING and your clients are left without cover they previously had.

One last thing "Partnering" I hope the FMA find you very soon; I am very sure they would not agree with your definition of what your job as a Broker is to do for your clients. I hope Partners Life find you as well as I am not sure they will like to hear what your intentions for all their business is should they ever slip from offering what you perceive to be better terms both for past and current clients.

Interesting subject and comments - Will not disclose my name for obvious reasons - I am a former employee of Sovereign that went through a number of "restructures" there - Why are you people not screaming fowl about those, I know personally a number of people that were made redundant at the last one ony a matter of years ago. Mr Thorman - senior underwriters do underwrite medical cover at all companies on a very regular basis which you do know as I know you and people who have and do your udnerwriting.

How come you are all screaming about RBNZ etc now - have you got nothing better to do? Why not wait till it is completed and then make your comments? There would be very few advisrs that have not churned at some time in there history and regardless of what is written on the business replacement form there would have to be some of you out there that do it just for the money.

Most companies offer incentive trips overseas - why is it an issue that PL does as well?

Naomi & the Coons have been involved and/or started up some of the largest life insurers in N.Z so why is PL any differant, give it time and see what happens before you stab it in the back

A lot of the comments on here appear to be aimed at Naomi directly which tells me one of two things. 1) you dont like Naomi and it is nothing more than a personal attack which shows how small you are or 2) You are foolish enough to think Naomi is the sole owner behind the company and has put up all the money to fund al expenses (which to the informed is completely wrong)

As a now retired broker, I must say I am rather shocked at the amount of (In my opinion) biased opinions and lack of actually facts on the matter. Not sure I'd want to use an adviser whom would appear to base their advice on speculation...

Well said MJS.

Life insurance companies owned by Australian Banks or run out of Alfred Street, Sydney need to stop and ask themselves the real reason why they are losing new business and existing policy holders to a start-up life insurance company like Partners Life. Seriously, some of these banks/insurers need to have a damn good clean out of the “dead wood” that currently graces the corridors of their head offices. Too many “yes men” on the pay role preaching their employer’s “brand” over improved definitions and benefits to policy holders. Naomi is a very smart lady and she has shown us time and time again how “easy” it is to do things better compared to an existing provider. Good on her!

Well done on all those who have voiced positive comments whatever their views may be.

Well done David Whyte on your observations , relavent as always .

Too all those who have winged, made snide comments etc i respect your right to offer opinion but to show such bias, bitterness etc i would question your ability to offer unbiased advice to your clients.

Our dealings with Partners have been minimal but I have known Naomi for many years and have found her excellent to deal with. I really do not see what the fuss over the commercial decision to let staff go is about.

There have been many , many decisions I have seen Insurance Companies make in my 45 years as a Broker that should have attracted far more comment than this but the majority of us were silent, really some lay offs..

Finally, the Gold Medal goes to Interested, in his or her comments they made the directors of Partners sound like a Tennesee Hillbilly Band, Well Done they brought a smile to my face.

Ps The Sun will still rise tomorrow