Partners Life Takes New Approach to Premium Pricing


Drawing on its claims experience data Partners Life is changing the way its premiums are calculated as it moves away from a one-size-fits-all approach to a more prescriptive model.

“We expect to increase our overall premium rates across all Yearly Renewal Term (YRT) policies by an average of 6-7% from the end of February next year,” says the firm.

“In the past, that would have been that. All clients would experience the average price increase and away we would go. But as we have got older and bigger, we have also become much more sophisticated in how we think about pricing.”

Early in 2020 the firm identified self-employed lives as a disproportionate driver of adverse disability claims experience and changed some of its self-employed products to avoid claims disparity.

…we believe cross-subsidisations are inherently unfair…

“In the third quarter of this year we completed our most substantial claims analysis work to date and have really been able to hone into client demographics to such an extent that we have now identified further pockets of clients whose claims experience has disproportionately contributed to the overall emerging claims experience, and the need for these overall price increases,” says the firm.


Partners Life says that rather than a one-size fits all pricing increase for all client demographics, it will adjust pricing to match the risk that each demographic group presents for each product type.

“In other words, we are addressing cross-subsidisation within our pricing because we believe cross-subsidisations are inherently unfair,” says Partners Life.

“We now have the data to identify them, and we are prepared to take the necessary steps to reduce them.”

From February 2022:

  • 20% of the firm’s YRT policies will increase (including age-related increases) by less than 10%.
  • 40% will see a total price increase (including age-related increases) of between 10% and 15%.
  • 30% will see a total price increase (including age-related increases) of between 15% and 20%.
  • 10% will experience total increases (including age-related increases) of over 20%

All figures approximate.

“We will become less competitive for some client demographics in respect to new business,” says Partners Life.

The firm’s current clients will have the benefit of its client loyalty discount.

“We are determined to lead the New Zealand Life and Health insurance market to sustainability and an important step towards this is to ensure we price appropriately for the specific risk we are taking on,” says the firm.

“As you will know, experience has shown us that where we lead, the market generally follows.”

The effective date for pricing changes by the firm will be 21 February 2022, and it will follow its usual process in respect to quote software leading up to that date