Released on: June 23, 2011, 1:58 pm
Author:
Pruhealth
Industry: Healthcare
PruHealth, the insurer that rewards people for engaging in healthy behaviour, has adopted what it believes to be a more sustainable and transparent commission model which rewards long-term partnerships with brokers and aims to deliver lasting client value. From April 2011, all Small and Medium Enterprise (SME) new business has been written on a 10:10 commission* basis, with 10% initial commission and 10% at each renewal.
Speaking at the Laing and Buisson conference, Dave Priestly, sales director at PruHealth argued: "The current market focus on low new business premiums and high initial commissions is unsustainable and the industry needs to adapt in order to decrease churn and over-commoditising the group PMI market. Combined with strong market demand for lower premiums, the combination of claims costs, commission costs and operating costs, outstrip the premiums being charged. As a consequence, renewal premiums are forced up, resulting in more companies looking to switch or reduce their PMI cover."
The new model is designed to reward long-term relationships by offering level commissions, enabling PruHealth to protect future premiums and remain competitive over the long-term. Brokers who sign up to the partnership scheme could be eligible for 'portfolio commission'**. This offers the potential for a quarterly new business commission uplift of up to 20% dependant on their portfolio retention, portfolio loss ratio and new business API.
Dave Priestly continued: "We are taking a partnership approach to SME commission and want to share greater rewards with those brokers who work in partnership with us to develop stable and sustainable portfolios. Client retention is as important for our long term success as driving new business. We have chosen to apply level initial and renewal commission for SME business to move us towards a more sustainable future. However, firms who work in partnership with us to develop long-term, stable customer relationships could benefit from a new quarterly payment of 'portfolio commission."
PruHealth believes this approach will help foster stronger relationships with its intermediary partners and will also bring more security to customer relationships, allowing them to reap the benefits of a longer term relationship with their insurer. Specifically in the case of PruHealth a long term customer relationship gives them greater opportunity to get more value from our Vitality programme. Health is not a short term commitment and continued engagement in the tools and partners provided within Vitality can make a real difference to people's health and as a consequence help control premium costs.
-Ends-
Notes to editors:
*10:10 commission applies to SME business only
**Portfolio commission (Measured per calendar month)
About PruHealth:
PruHealth, the health insurance provider, was launched into the UK market in
October 2004 as a joint venture between Discovery and UK insurer, Prudential, in
response to a growing need for consumer-directed private medical insurance products.
PruHealth can provide customer with a PMI adviser, small business health cover, company health insurance benefits and private medical insurance.
PruHealth received several industry awards, including the Most Trusted PMI Provider at the 2010 Moneywise Awards, the Best PMI Provider at the 2009 Moneyfacts Awards, Best use of Marketing to Intermediaries (Brokers) at the 2010 Health Insurance awards and the award for the Best Individual PMI provider at the 2010 Health Insurance Awards and 2010 Cover Excellence awards.
PruHealth is the only UK insurer to provide all its members with access to the fully
integrated and unique Vitality wellness programme. The Vitality programme gives
members the tools and motivation to improve their health and wellbeing and then
rewards them for healthy behaviour.
PR Contact:
Caroline Southwood
Head of Corporate Communications
Prudential UK and Europe
Marble Arch Tower
17th Floor
55 Bryanston Street
London
W1H 7AA
+44 (0)7831 434 096
www.pru.co.uk