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nib: Opportunities for advisers

Direct-to-consumer sales now make up half of nib’s new policies but its adviser business is growing strongly, its chief executive in New Zealand says.

Wednesday, February 25th 2015, 6:00AM 6 Comments

by Susan Edmunds

It was announced this week that nib’s New Zealand business had achieved net policyholder growth of 3.3% in the second half of last year.

It posted an operating profit of $1.3 million, up from $0.5 million in the same period a year earlier.

Its premium revenue was $72.9 million for the six months, up 8.1% on the same period in 2013.

Direct sales were introduced by nib last year and Rob Hennin said sales had grown month-on-month every month since.

The six-monthly result was affected by a Premium Payback portfolio. Hennin said it was a legacy product that paid out policy-holders the difference between the premiums they had paid and the claims made when the policy term ended.

“It was a very interesting product when it launched. We inherited the product with the purchase of the business,” he said. “It’s an old-fashioned product.  It’s one where neither the adviser nor the customer is as thrilled with the product today as they were a decade ago."

The company bought TOWER’s health insurance business in New Zealand.

Hennin said nib had been consulting with advisers to find a more modern product to meet their needs.  “We’ll offer migration pathways to customers to ensure a better outcome.”

He said he could not give details yet on the growth in the adviser business – advisers distribute nib’s Ultimate Health range. “But at the year-end I will be able to and it’s significant growth, substantial. That’s because we have a best-in-class product.”

Nib has made waves with its direct products but Hennin said the company was taking a multi-pronged approach to grow the category, rather than targeting a particular type of product.

“We’re committed to being a leading player in the adviser market.”

HFANZ has reported a lift in insurance coverage in 20- to 40-year-olds, which it attributed to growth in products such as nib’s everyday policies, covering things such as GP visits.

Hennin said the company was “leading the charge” bringing young people into the market but said there were opportunities for advisers in that demographic, too.

“There are lots of very seasoned, talent advisers and if they use not just their network but the tools available to them, websites, mobile apps, for lead generation they can access the younger pool as well as we can.”

« Good response to more sustainable commission: AIAAMP life business flat, but company on track »

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Comments from our readers

On 25 February 2015 at 10:23 am billy the broker said:
I wonder why there are no more of these premium payback policies anymore?? So sad for the Insurance Company but yet so good for the client...
On 25 February 2015 at 2:26 pm Majella said:
Premium Payback! horrendous premiums, which don't seem to reduce markedly one the PPB has been paid out, much to everyone's surprise. but what really grates is that there's no 'migration pathway'. Any change from the old policies to the new policies are fully underwritten, but, despite the work required, which is the same as advising on any new policy, nib is as tight-fisted and nasty as Tower was, and won't pay new business commission on such policies! as it's 'best in class' the Code determines that it's almost impossible to recommend an alternative, even though nib (Tower) shows no loyalty to a long-term client.

50% of sales online? in Australia, I understand, that's now 100% of sales. It's hard to see how the Adviser Channel is going to survive, when nib is directly COMPETING with Advisers!
On 4 March 2015 at 10:46 am RS said:
nib don't sell Ultimate Max directly, only the "third party cover" cheap policies. That's as it should be. If you can't sell the difference between UM and the Everyday plans, you should reconsider what value you're offering.
On 5 March 2015 at 12:24 am billy the broker said:
Majella, yes some are bad. But there are some beauties out there to this day. Why would you want to re write a premium payback policy anyway?? Have you done the numbers??

Sovereign certainly did when they Inherited the Met-Life medical policy. And offering punters the chance to lose the payback for cheaper premiums.

AIA stopped their payback policy as well a few years ago.

Do we have Whole of Lifes anymore?? Work it out for your self Majella, sure you been in this game for awhile. Its all about the money fella, not us!!

Sovs biggest business comes from the banks not the broker side.
On 5 March 2015 at 9:52 am regant said:
It's great to get to talk with under-30's. Just advised a couple aged 19 and 20 who are setting up flat. After discussing the tru purpose of insurance the decided they would rather put in place a chunk of trauma, a bit of life and GFI Health option, along with basic contents insurance, than anything from the direct catalogues.
On 5 March 2015 at 3:59 pm Tash said:
Hennin says they have a "best-in-class product". Have you examined the exclusions in NIB's Ultimate Max policies?

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