1 Comment 1 Commentby Jenha White
From February Fidelity Life's new business premiums for Platinum Plus yearly renewable term (YRT) Life Cover increased by an average of 7%.
Level Term Life premiums increased by an average of 13% and all other level term benefits such as trauma, total and permanent disability (TPD) and income protection increased by 6%.
Fidelity Life chief executive Milton Jennings says these changes have been made partly because of income tax changes and also because its claims have gone up 50% over the last two years.
In 2008, Fidelity Life paid out $26 million in claims and in 2009/10 it was around $40 million with a majority being for life and trauma.
Jennings believes economic recessions put more stress on people so claims tend to go up.
"However claims can be a bit volatile, from past experience we might find this year we have low claims after two years where there have been a lot of claims."
He says Fidelity Life put the life rates down in 2009 by 6% but they now have to reverse that, increasing it by 7%.
"So we're still very competitive on our life premiums, just not as much as before."
AMP has increased its risk premiums on life insurance by an average of 3.3% and for trauma insurance by an average of 2% for new and existing business renewing after January 31.
AMP wealth protection manager Brian Leneha says this change flows on from a full review of pricing including allowance for the taxation basis for life insurance while also introducing some enhancements to the underlying quality offer at the same time to add value.
He says the insurance industry is dynamic and AMP will continue to review prices as that is the nature of stepped premiums.
"However we do take a long term sustainable approach."
Jenha is a TPL staff reporter. jenha@tarawera.co.nz
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