Anti-commission argument not winning: Ballantyne

Naomi Ballantyne

The NZIER report was delivered to a panel discussion in Auckland last week, hosted by Sovereign.

It said insurers’ policy acquisition and maintenance costs were high, at more than 40% of total annual premium income (API). Those who used advisers had acquisition costs up to 100 percentage points higher.

The report said pressure was going on insurers because the market was not growing and the only increase in API was due to the lives already insured becoming riskier and more expensive.

“The financial data indicates that life insurance distribution costs average about 44% of premium revenue. Just over half of these costs are commission payments," it said.