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: Wednesday, April 8th, 11:40AM

Insurance

rss
Latest Headlines

Letter: AIA disputes PlanTech's findings

Thursday, May 2nd 2002, 2:17PM

The lack of substantial research in Louie Dimovski's article does little to enhance the reputation of so-called "independent" industry research.

A few years back I wrote a couple of articles criticising PlanTech, and other research houses, for ignoring two significant factors which advisers would likely take into account in the product selection and recommendation process, namely price stability and product 'sustainability' in relation to claims loss ratios.

I also suggested that the research houses should take a 'base year' against which to measure product price movements, say 1996, when the industry-wide premium income for this product became more significant.

Is PlanTech signaling to the market that all the expertise and resources of this research house can only find price movement information going back 2 years? How strange!

As I have stated previously, AIA's disability income pricing was widely regarded as a bit on the expensive side between 1996 and 1999/2000. As other offices such as Sovereign, AXA, and Royal & SunAlliance pushed their disability income premiums up over that four-year period, the pricing differential closed and eventually left AIA, in certain cases, below the market.

If PlanTech had taken some more care in conducting its so-called research, it would have discovered that AIA was last to increase prices in that period for two primary reasons

  1. We were the most recent entrant to the disability income market, and,
  2. We had consequently a much smaller book from which claims would eventually emerge.

To suggest that we were offering "ridiculously" low premiums is a gross distortion of the truth, and calls into question the competency of this "researcher" to carry out objective, impartial and meaningful research.

Price increase information is normally announced by a life company to advisers and policyholders in advance of that price increase taking place.

This is therefore information which relatively easy to access with a little professional and focused effort.

It clearly seems to be beyond the wit and competence of PlanTech to carry out adequate research into the history of disability income pricing in the New Zealand market.

Ask each company for a five-year disability income price history, and if they decline to respond, publish that refusal to release the data as one of the research findings.

Had PlanTech stirred itself to carry out proper research and produce something meaningful, rather than the emotive blather in the article, he would have discovered that over a five year period between 1995 and 2000, Sovereign, the clear market leader, had increased its premiums by 100%.

Rather than fire off ill-considered and poorly researched allegations of irresponsible pricing, PlanTech should take a more professional and considered approach to the issue and apply proper research techniques to arrive at some meaningful conclusions.

Read the original story Some DI premimus up more than 40% here

David Whyte is the managing director of AIA in New Zealand

« Some DI premiums up more than 40%S&P paints a poor picture »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
Insurance Briefs

Life and health insurance through the eyes of a pandemic
Partners Life’s Naomi Ballantyne calls on her 38 years in the industry to discuss potential trends for the industry through lockdown and what we might see moving beyond.

MDRT plans virtual annual meeting
The MDRT's annual meeting, which attracts more than 10,000 delegates from around the world, will be a virtual event this year.

ANZIIF cancels insurance awards
The Australian and New Zealand Institute of Insurance and Finance (ANZIIF) has made the decision to cancel the 2020 Australian and New Zealand Insurance Industry Awards.

Partners Life supports rainbow community
Partners Life is again supporting the Rainbow Excellence Awards.

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
 
Site by Web Developer and eyelovedesign.com