Path to one company for life insurer
OnePath has decided to merge its two life insurance companies – one that services advisers and the other for bank-distributed product.
Monday, October 6th 2014, 12:05PM
Managing director John Body says the move is about simplification as there is no need for two life companies and all their associated compliance costs.
He says there is no loss of staff and the bank is still focused on third party distribution.
Overall the two companies generated annual premium income of $192 million in the 12-months to August 30, which is a $13 million increase on the previous year.
OnePath Life, which is the adviser company, accounted for just over $100 million of this, with the remainder coming from bank-distributor OnePath Insurance Services.
“We are absolutely committed to the adviser channel,” he says.
OnePath is planning a major product relaunch in November that will have a focus on income protection.
“That is clear evidence we are not going to walk away from (the adviser market).”
Body says insurers are facing big issues with churn and lapses. His view is that the level of churn is dimishing.
“All the business that was going to move has,” he said.
Over OnePath’s total lapse rate reduced to 14.9%, down materially on its lapse rate of over 18% in the year prior.
The process of merging the companies starts off with public notification of the intention to put the companies together. Policyholders and stakeholder feedback is sought on the proposal. This has been done via public notices issued over the weekend.
After that the company puts its plans, and the stakeholder feedback to the Reserve Bank which is the prudential regulator. The Reserve Bank then either approves the plan or otherwise.
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