Benchmarking Life Company Service and Performance

Introduction

The Life Insurance Framework has highlighted that Licensees should develop initial assessment and ongoing management processes for the companies and products on their life insurance approved and/or recommended lists.

To assist Australian Financial Services Licensees we are extending our current risk focussed consulting services by developing a website designed to help Licensees assess the life companies performance as its affects clients and advisers.

We don’t believe that it is simply enough to assess the companies on simple measures or include all companies products on an approved or recommended list.  We think that each company should be assessed on their merits so that a robust, defensible recommended and/or approved product list can be developed which is tailored to the advice needs of the Licensee and their Advisers.

We are developing a website to support our activities helping Licensees to research the life companies.  The information published on the site includes assessment of each company’s relative strength or performance in the key areas of:

  • financial management
  • premium rates for a range of insurances that vary by sum insured, type of cover, age, sex, occupation and premium types.
  • product terms and conditions
  • service provided to advisers in the key areas of
    • underwriting
    • claims management
  • business support provided to licensees and advisers
  • market support

For the service based measures we will include the opportunity for advisers to provide input into the service by way of responses to a survey designed to assess the relative performance of the life companies in the key areas that affect advisers.  

Free Trial

Once the website is completed, the free trial will provide access to our life company performance research. At the end of the trial, the service will be enhanced and become subscription based.

To register for the free trial complete the following form.

You must be a director or employee of an Australian Financial Services Licensee to access Life Company Performance free trial.

Access details will be provided by email.

Register for the Free Trial
Subscription Fees

Subscription fees for the Life Company Performance Benchmarking Service have not been finalised. However, fees will be based on the number of advisers.  This approach should ensure that the subscription service is affordable for a wide range of licensees.

Brochure

Download the Life Company Performance Benchmarking Service brochure using the link below.  The brochure provides more information and a sample report, based on previous consulting engagements.


Financials

The purpose of this section is to provide licensees with summary financial information so they can make some conclusions about the relative sustainability of the life companies.  The Australian Prudential Regulation Authority (APRA) publishes summary financial information but does not communicate the results of its ongoing compliance activities to licensees, advisers and policyholders, we believe that financial information should be made available to licensees as they are responsible for the life risk insurance advice provided.

To assess

  • the relative financial strength the companies have to withstand losses and the likelihood that the companies will still be in business when it comes time to pay claims, 
  • the financial flexibility to invest in systems, product development, sales and marketing initiatives etc to keep the company competitive and efficient

the Companies were assessed on

  • meeting APRA solvency Requirements
  • Liabilities and reserves including Statutory Funds’ solvency information including liabilities, excess reserves and shareholders’ funds
  • An outline of the arrangements that their company has to access additional capital
  • Reinsurance arrangements including whether the life company or the reinsurer is managing claims
  • S&P Life Company Financial Strength ratings
  • ongoing profitability and access to additional capital were also used to measure their financial flexibility and stability as a business,
Products

LifeRisk Partners provides product research, however product research from other Research Houses can be used.

Premiums

Premium rates from a range of combinations including Life Cover, TPD, Trauma, Child Cover Income Protection and their major options are maintained using LifeRisk Online technology. Variables such as occupation, level of cover, premium type, frequency are also taken into account.

Additional research such as the range of occupations covered or detailed assessment of particular occupations e.g. farmers, mining or medical professionals can be included

Service

Life Company Service Performance is assessed by using a combination of

  • direct research collecting information on the life company service activities and standards and the level of quality in the key areas of
    • underwriting and
    • claims management
  • surveying advisers and licensee managers on these key areas..
Business Support

Business support is measured by direct research to enumerate the activities undertaken to support advisers and licenses and surveys of advisers to measure their effectiveness.


For example

  • for advisers data collection could include support running local marketing campaigns, assistance with sponsorship signage, white labelled flyers support staff training on life company quote and other systems.
  • Adviser education programs
  • for licensees support could entail adviser reporting, including the level of replacement insurance, more formal training for risk specialisations e,g, business structures, business insurance, estate planning, post graduate degree courses in conjunction with Universities.
Market Support

Market Share is a measure of the support Advisers and Licensees by placing business with these companies.  Unfortunately, the measure of levels of market support by advisers may be affected by the use of restrictive Approved Product Lists.

The Financial Services Council have indicated that market share should be included in the decision making around APLs.  We dont that the inclusion of market support is appropriate particularly with new companies entering the market.

Nevertheless, the purpose of this section was to provide licensees with market share information and identify underlying trends that can’t be easily seen not by simply comparing inforce premiums or new premiums. It is especially useful to examine trends to determine which companies are increasing or losing their new sales share and in each market segment.

APL Tender Support and Facilitation

LifeRisk Partners provides assistance with Approved Product List tenders including recommending the composition of the committee that will be responsible for assessing the tenders and drafting the APL recommendations. drafting the tender document, assessing responses, facilitating discussion, drafting and finalizing reports.

Consulting

LifeRisk Partners provides assistance with Approved Product List tenders including recommending the composition of the committee that will be responsible for assessing the tenders and drafting the APL recommendations. drafting the tender document, assessing responses, facilitating discussion, drafting and finalizing reports.