Cigna Launches a ‘No Clawback’ Option

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Cigna launched a new commission model this week that ends clawbacks within the first two years of a policy being taken out. Renewal commissions will also be paid from month two.

In a live stream held last week, and hosted by Cigna’s CEO Gail Costa and TV presenter Jehan Casinader, the firm’s General manager – Distribution David Haak outlined changes to the insurer’s remuneration.

Haak told an online audience of more than 1,200 advisers and industry professionals the servicing of customers doesn’t start from month 13, “…it starts from the moment their policy is issued – and we’ve recognised that”.

 “Our renewal commissions will now be paid from month two,” he said. “With the new regulatory environment you’re now operating in, we acknowledge the extra time and work you’ll be dedicating to your business.

“We are also introducing an ‘as earned’ payment option. Choice matters and so we are giving you the option to spread your commission payments over the first two years. With this option there is no clawback.”

The firm’s new commission structure features:

  • Renewal commissions paid from month two
  • All commissions to be paid regardless of persistency level and/or group affiliation
  • An ‘as earned’ payment option – to spread remuneration over the first two years instead of a lump sum, meaning no clawbacks if a policy lapses in the first two years

    David Haaak, Cigna NZ's new General Manager – Distribution.
    David Haak, Cigna NZ’s  General Manager – Distribution says there will be no clawbacks in the first two years of a new policy.

During the presentation Cigna’s Head of Product, Alison Manning, said that over the last 18 months the insurer has made more than 70 product enhancements and launched a new specific injury product to cover bone fractures and accidental burns.

“Following feedback from advisers, we have launched specific injury cover,” she said.

“This product provides extra financial support for customers when they have an accident or suffer an injury such as fractures or burns.”

While premiums vary across gender and occupation, age or smoker status are not taken into account. Monthly premiums start from $7.62 for women and $10.36 for men and a maximum sum assured of $5,000.

Product features include:

  • Higher payment for multiple limb fractures
  • Cover for injuries that result in surgery following an accident – even if it is not one of the injuries listed in the policy
  • Cover for second or third-degree burns from an accident
  • Claims are paid as a lump sum

The specific injury policy can be taken out alongside other products such as assurance extra, business assurance, or agri business extra ranges, including life or trauma cover.

Writing new business has also become easier with advisers only required to go through one set of questions with clients.

Debbie Eyre, the insurer’s Chief Operating Office, says its new underwriting rules make it easier for customers to understand what the firm needs to know.

“We are only asking your customers what we want to know about,” she said. “We are calling this ‘event-based questioning’ and it’s designed to achieve higher disclosure rates and therefore maximise completions at the point of sale.

“There’s one set of rules for everyone, regardless of the product or benefit. That applies to income protection, trauma, mortgage cover, waiver of premium, and life cover – there are no restrictions or limitations.”

Our team is now freed-up to talk with you about the more unique cases…

Eyre says the new system, based on a complex AI system that will ‘learn’ as it goes along, means the firm’s staff will have more time to help advisers with the complex and non-standard proposals.

“Our team is now freed-up to talk with you about the more unique cases. It gives advisers more control to issue business on the spot, to refer applications where they may want to look at some different terms, or talk to us about a unique need,” she said.

“This is a very adaptable system that means we can make changes quickly and continuously improve – and that’s what we intend to do.”

Costa reiterated the company’s commitment to advisers saying New Zealanders need access to independent quality advice.

“Advisers play an essential role in meeting this need and our focus is on building long-term relationships that are built on trust and a shared purpose,” she said.

Download Cigna NZ’s PDF covering its Thursday 8 April announcements here and watch the video presentation on Cigna’s adviser hub here.