My piece in Asset Magazine is all about working out your cost to serve different types of client. Why? To help you effectively price your services, or stop offering services which are costing you money, and generally get a better idea of what to promote, and what to tolerate in the rough and tumble of managing expectations of clients and keeping your business profitable. Do grab a copy of the magazine and check it out.
If you are feeling a bit weary as you work out the last couple of weeks before Christmas we think we know why - look through your Quotemonster in box you will see quite a few rate updates. In fact this has been the busiest period for pricing and rating updates we have recorded in the last two years - a new high of ten product lines re-priced compared to seven previously. On top of that two new variants of income cover were added (AMP and AIA added to their ranges) so we have a total of twelve.
Looking forward the rush isn't quite over. Two companies have scheduled changes: nib and Southern Cross. Sovereign has a policy fee change, and at least one other company has more rate changes to come. It will clearly be a busy New Year as well.
Over the last two weeks the following changes have been implemented:
Sovereign Income Protection and Mortgage Protection Updates
AMP Lifetrack Income Cover Updates
Those changes included rating, pricing, brochures, and policy document updates. At the same time minor technical changes to ratings
Sovereign Income Protection and Mortgage Protection rates have been updated on Quotemonster.
AMP has announced changes to their income protection range and have supplied new rates and policy documents. We expect to have the pricing updated by Monday and the product rating also early next week.
We are delighted to let you know that Kelly and her partner Ese were blessed with a baby boy at 11.20am on Friday morning. Baby Jai is 9.2 pounds and mother and baby are both doing well.
But don't worry, there are plenty of us left to help you out: Alan, Fran, Albert, Beth, and I are all here to look after you in Kelly's absence. We do hope to get Kelly back at some stage, but that is up to her.
Remember, the fastest way to get help with Quotemonster is to click on the support button and we can usually respond within a couple of hours.
Quality Product Research has completed the initial draft of the following business insurance ratings:
•Life plus Business Future Insurability
•TPD plus Business Future Insurability
Subscribers operating in the business insurance sector are invited to drop us a line and we will send out draft ratings for their review and input.
Insurers will be able to review the ratings in the net update of the QPR database which we will supply over the next week.
We would be delighted to get some feedback – particularly on whether the items / features list is right and weighting issues.
As I reviewed these ratings I noted a certain “blurring of lines” between “Business continuity” and “Business Expenses” as some policies “Agree” the level of business expenses. There also seems to be a great tendency to bring in "personal" IP features, which our current review model intends to leave out.
This article about nib in Australia now offering offshore surgical cover caught my eye – I think there could be a good market for this product here.
Two companies have announced changes to the maximum benefit levels permitted for Agreed Value benefits under their Income Protection Product ranges (Fidelity and Partners Life). They are likely to be joined by others.
In Quotemonster you can quote whatever benefit levels you please - so we do not need to make any rule change to accommodate quoting at higher levels of replacement. Although you will want to keep in mind the maximum replacement levels set by the insurers concerned.
Several advisers have asked us if we will offer the ability to compare Agreed Value and Loss of Earnings contracts with each other. In effect this creates an "unmatched" basket of policies, which we have generally tried to avoid. However, as it becomes increasingly common to use research to compare different policies we do plan to offer this facility in the future.
Last night we updated the Quality Product Research Databases with a number of scoring changes to reflect product enhancements done by insurers recently.
• AIA Total and Permanent Disability Insurance - we have captured the upgraded definition, which is a significant improvement in the score
• AIA Income Protection, Indemnity, Agreed and Premier research ratings are now updated
• AMP Lifetrack Disability (TPD) and Trauma changes
Medical Assurance Society has been scored, like CIGNA, and the Southern Cross Critical Illness product, but isn’t live on the site – if you need to access those drop us a line and we can email you summary comparisons. We expect to put these live after a site re-design in the New Year.
Partners Life Updates – to Income Protection, Mortgage Protection, and other minor changes have been made. The most significant change recognises that although Partners describes their Income Protection product as Indemnity the formula dealing with the treatment of offsets makes it operate the same as a ‘Loss of Earnings contract’ so the amount score has been increased for this benefit to the same as other Loss of Earnings contracts.
The issue of weighting for Loss of Earnings contracts over Indemnity contracts is a difficult one. On the one hand, in our Income Protection claim model where ACC payments or other offsets are present there is an undeniable advantage to the Loss of Earnings definition: more money would be paid. This is supported by the fact that most insurers charge more for this option. On the other hand we know that the likelihood of these offsets varies considerably with occupation class: class 3 lives are more likely to have a claim involving an ACC payment than class 1 lives. One of the challenges in getting this weighting to reflect real-world experience is getting insurers to extract the data about the level of offsets, their duration, and impact, from their claims systems. We have asked insurers for this data and received widely diverging estimates and few hard facts.
However, it is an on-going project to obtain more reliable information and we plan to review the claim model in the New Year. We will also shortly be offering a claim modelling tool so that you can explore these issues for yourself – altering duration of claim, amounts of offsets, including specified conditions, and so on, to see how each policy performs.
In the meantime we do encourage advisers to consider all the factors that attach to the nature of the Income Protection plan they are considering: income variability concerns support an Agreed Value purchase, Offset concerns support a Loss of Earnings purchase, and value concerns support an Indemnity purchase.
Partners Life have released this announcement:
"With the 1st of November changes coming into effect, we have updated our product overview sheets and policy wordings with our great new enhancements. We have also updated our application forms, and these are all now available on MyPartnersLife.
The main application has had the Household Expenses Details section redesigned to make it easier to record your client’s information. We have also made the page numbers darker on both the main application and children’s application so they are easier to read when scanned. Please take a moment to go through our new forms and get to know them.
We are still accepting old applications, however please start to phase these out as soon as possible. As always, our applications are available to order through the MyPartnersLife Stationary tab."