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: Thursday, March 28th, 6:28PM

Insurance

rss
Latest Headlines

Sovereign fronts up with 230% offer

Sovereign has jacked up its life insurance commissions to 230% as the battle for the third-party advisory space heats up.

Thursday, October 15th 2009, 5:49AM 2 Comments

by David Chaplin

In its offering sent to the market this week, Sovereign will apply a basic initial commission rate of 230% across its TotalCareMax life rate for age policies.

Other Sovereign products including its level premium, compulsory group, TPD, trauma and health policies would not be subject to the new commission rate, a company flyer says.

The increase, which is understood to add about 20% above its previous maximum rates, will be available to all advisers but it is unclear whether Sovereign will pay volume overrides to advisory groups.

However, advisers in Sovereign's tied advisory group, SovNet will continue to receive a "loyalty bonus", expected to add a further 10% commission on top of the basic rate.

It is understood approximately 500 risk advisers sit under the SovNet banner.

Sovereign's move has puzzled some market participants given New Zealand's already high, by world standards, insurance commission rates were expected to come under pressure, particularly with new tax rules for life policies due to come into force next year.

Barry Read, Newpark Financial Services general manager, said Sovereign was the third insurer to increase commissions recently.

"We were surprised [at the Sovereign increase] in light of the pending tax changes which insurers have been saying would increase premiums," Read said.

David Haak, Sovereign head of adviser distribution, was unavailable for comment.

 

« Proposed ACC changed aimed at affordabilityRB gears up to regulate insurance sector »

Special Offers

Comments from our readers

On 15 October 2009 at 2:14 pm Adviser X said:
There's no additional bonus payable (apart from the already existing 10% SN loyalty bonus you mentioned) when taken with the 230%, plus it is essentially an olive branch for making the claw-back period 33% longer (for all products, inc the ones not on 230% initial commission) As generous as it sounds?
On 27 October 2009 at 9:23 am O for Overpaid said:
The strategy from Sovereign is obvious, buy as much Term Life business as you can before insurance commission disclosure becomes mandatory with a view to a large portion of it sticking mid to long term. Once commission disclosure is obligatory they will repackage an offering for advisers but you can bet your bottom dollar it won't be this obscene. Strangely enough a mate of mine was encouraged by his "independent adviser" to "switch" to Sovereign's fantastic rate for age product last week. No mention of 230% during that meeting. The fundamental flaw in the NZ market will never be addressed whilst these suppliers continue to compete on adviser remuneration and not market leading Product design.
Commenting is closed

 

print

Printable version  

print

Email to a friend
Insurance Briefs

Partners helps fund depression recovery centre
New Whakamātūtū Wellington Depression Recovery Centre gets financial boost from Partners Life.

AIA adds cover for prophylactic surgery following cancer
AIA makes changes to policies and adds preventative surgery for several types of cancer.

Chubb appoints David Morrow as Country President for New Zealand
Chubb has appointed David Morrow as Country President for New Zealand.

nib adds specialist skills to its board
Two new board appointments at health insurer nib add new perspectives, chairman says.

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