Zurich to provide premium rate certainty for two years
To give advisers and their customers greater confidence about insurance premiums, Zurich says it will not increase the base premium rates of its risk products in the first two years for any new policies written in 2016.
Zurich told Risk Adviser the announcement comes as the life insurer recognises the need for "more certainty" about risk premiums.
"In response to adviser feedback, we are pleased to confirm that for new Zurich Wealth Protection policies written between 1 January 2016 and 31 December 2016, the only premium rate adjustments that will apply up until the second policy anniversary will be the normal age and CPI-related increases," Zurich said.
“For these policies, this effectively keeps the underlying base rates unchanged for the first two years of cover and is designed to give advisers and their customers added confidence and certainty.”
Previously, Zurich general manager of life and investments, Philip Kewin – responding to moves by Asteron Life to hold risk premiums during the clawback period – said the insurer is supportive of initiatives taken by insurers to “provide affordable and sustainable protection for customers”.
"As part of our ongoing strategy development and execution, including dialogue with advisers around LIF, we are exploring many product and service innovations,” Mr Kewin told Risk Adviser.
“While we are looking at various options, our overarching focus is on maximising the affordability of cover over the entire life of the policy. Sustainable product design and pricing is key to this, and our soon-to-be refreshed product range will reflect this.
"Pricing and underwriting appropriately will allow more stability in pricing, breaking the cycle of regular increases seen across the industry in recent times and thus making it easier for customers to keep their cover longer,” he said.
Also commenting on Asteron Life's initiative, TAL chief executive Brett Clark said the insurer is "not considering premium freezes" at the moment, but the business is continuously reviewing and updating its proposition to ensure it is "optimal for customers and advisers".
Risk Adviser understands that Zurich will be making further announcements about insurance product and premium initiatives in the coming week.
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