Lumley to change its name
Lumley Life is to rebrand and keep promoting its renewal commissio-based National Partnership model.
Monday, January 19th 2004, 2:08AM
Geoff Black, Lumley’s Sydney-based general manager, will head PrefSure’s life business on both sides of the Tasman.
He says while the New Zealand operation is quite small the company plans to stay in New Zealand and keep growing as a specialist life insurance player.
He says the company will stick with life insurance only and won’t move into investments.
His message is that there won’t be a lot of change in New Zealand as PrefSure has no existing operations in this country, nor has it any baggage. The main differences are that the business will be rebranded and more effort will be put into building up its adviser base.
PrefSure Life and Lumley Life will continue to trade under their current names until they are merged on March 31.
Lumley’s business is been based around its "National Partnership" model where the company gets together with advisers who share "a similar philosophy and beliefs". The idea is that advisers’ remuneration is skewered towards renewal commissions, as opposed to up front ones, and in return Lumley helps advisers build their businesses.
Black says this is "arguably quite a hard way to enter the market" as the industry tends to pay advisers large upfront commissions on life insurance products.
He admits it has been harder to establish the National Partnership in New Zealand than Australia This has particularly been the case in the past year where the ownership of Lumley has been in question.
"We have lost a year of momentum." However, he believes advisers who adopt this model have better cashflows in their business, and over time the industry will move towards having a greater emphasis on renewal commissions.
He says New Zealand upfront commission rates are "very, very high" compared to other countries and they are unsustainable over the long term.
While Lumley’s focus is on the national partnership model it will still deal with other advisers. Currently about one quarter of its New Zealand business comes from advisers and groups who are outside the partnership.
Black says Lumley New Zealand underwriting was shifted to Sydney last year and it is currently in the process of centralising its administration across the Tasman.
Jon Lloyd will continue to run the New Zealand operation in this country.
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