Zurich Financial Services Australia (Zurich) today announced a number of changes to its retail life insurance offering, designed to help advisers position themselves for the forthcoming Life Insurance Framework (LIF) transition, due to start in July 2016.
Designed to increase the simplicity, affordability and sustainability of Zurich’s life insurance range, the changes include simpler pricing structures, a reduction in Term & TPD new business premium rates and the launch of a new range of Income Protection products, intended to be more ‘future proof’ in both design and pricing.
Commenting on the changes, Zurich’s Life and Investments General Manager, Mr. Philip Kewin, said that advisers and customers alike were seeking increased simplicity, certainty and stability in life insurance premiums.
“The changes we have made reflect a move towards simplifying our product range, pricing and execution to benefit advisers and their customers. We feel this sentiment has been lost in much of the recent industry dialogue.”
“The retail income protection market has faced many challenges in recent years, with rapidly deteriorating claims experience being reflected in a seemingly constant cycle of rate increases ,” he said.
“With the launch of our new Income Protector range we hope to break this cycle with a design that focuses more on the core benefits of income protection and pricing which is more in line with the latest claims trends.
“We expect this will drive much more stability and predictability in premiums, which is vitally important to both advisers and customers.”
Following feedback from advisers, Zurich has looked to further reinforce this stability with a two year ‘rate certainty’ commitment. Under this offer, all new Wealth Protection policies written during the 2016 calendar year will benefit from at least two years of rate certainty.
“We are effectively keeping the underlying base rates unchanged for the first two years of the policy, to give advisers and customers added confidence and certainty about the cost of cover,” said Mr. Kewin.
From 21 December Zurich will also replace its range of bundling and loyalty discounts, in favour of a simpler approach which will enable advisers to access the most competitive rates all the time, for both packaged and standalone cover across all products.
“As well as being easier to understand, this new proposition allows us to deliver increased value for customers, and is reflected in Term & TPD new business rates that are 6% lower than our current rates for lives under age 55,” he said.
Mr. Kewin added, “While this is only the first step, it’s a very important one, as we are determined to see an industry response to LIF that goes beyond adviser remuneration and delivers genuine benefits to advisers and customers.”
A new PDS reflecting the changes will be available in early December.