Treating existing customers fairly is something Partners Life is focusing on while the country works through the coronavirus issue and most New Zealanders are in lock-down, says the firm’s Managing Director Naomi Ballantyne.
In a video message to advisers on 25 March Ballantyne confirmed the company is going ahead with its previously announced changes. On 5 April it will implement a rise in premiums and changes to its commission structure.
“We are absolutely focused on fair,” says Ballantyne. “Our job as a life insurer – first and foremost, before anything else – is to be fair to our existing customers. People who have already been paying us premiums for the cover that we provide.”
Turning to the firm’s current underwriting restrictions for new customers, Ballantyne says this is also about Partners Life being fair to existing customers.
“The world has changed, the risks have changed overnight,” she says.
Ballantyne compares the impact of coronavirus on society to an individual suffering a serious medical event before their insurance is agreed.
“What we have now is a significant risk of financial harm, and mental health issues in a populace that is locked up and has no certainty about their jobs and their income into the future. And that happened overnight,” she says.
We are protecting our existing insurance customer pool from the risks that new customers will bring in…
“We are protecting our existing insurance customer pool from the risks that new customers will bring in.”
Revisit Clients
Ballantyne says advisers may have to revisit new clients and reassess their circumstances against currently-available products.
“The products that are available to you today to meet the needs that you have identified for that client may have changed,” she says. “That’s not about your advice, that’s about what has happened in the world. It’s not your fault. It’s not our fault.”
Ballantyne also cautions advisers not to move clients from one policy to another for the time being.
“I would suggest if you are replacing clients in this environment you don’t,” she says.
Commission Changes
As for commission structure changes, Ballantyne says advisers who are already FAPS will be paid FAPO from 1 July.
“For those that delay applying for the transitional license, then whatever we currently do around dealer group override or not – depending on their advisor circumstances – we will just continue until the deadline is hit,” she says.
“But we would certainly encourage advisors to take whatever spare time they now have available to them over the next few weeks to complete that license process and become a FAP.”
Addressing apparent gossip about Partners Life’s board and its investors, Ballantyne says there’s been talk the firm is making changes because of them.
We have the investors backing us…
“I am going to tell you categorically that is absolutely not true,” she says. “We have the investors backing us and the board has allowed us to run our business, and have allowed us to use our experience and our expertise to make the calls for this business.
“Blackstone has been nothing short of amazing. Whatever we need, they are there for us to deliver.”
Blackstone is a US-based private equity firm that took a minority shareholding in Partners Life in 2016.
“Our reinsurers are following our lead,” says Ballantyne. “So we make changes and we tell them what we’re doing. They are not telling us to do anything. Competitors are following suit.”