Insurance
Churn report due in mid-2016
Wednesday 16th of March 2016
The authority wrote to 12 insurance companies last year asking for data on all new policies written in the past five years, including policyholder details, adviser details and commission payments.
It also included a questionnaire asking what the premium levels would be if churn was reduced and the claims experience of replacement business.
That was in May and there has been little discussion of the investigation since.
FMA spokesman Andrew Park said work continued.
“We are completing our analysis of the information we received and expect to make a report available in the middle of the year.”
Comments (2)
Mike King
I trust the FMA will seek some input on its conclusions from the affected - the insurers. Otherwise, it could be another MWJ fiasco.
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8 years ago
Peter Crawford
When the FMA report is written, it will be interesting to see how FMA addresses issues beyond the adviser I.e. let’s assume everything had a level 25% commission (and soft dollar was banned), as these large companies seek to increase their market share, would, or how would, the issues that affect the consumer change?
E.g. how an individual should balance their future potential outcomes/ claims scenarios. You’d understand that a client could be better staying on an existing policy due to the development of now ‘pre-existing conditions’, but they may be offered new cover that is attractive if the policy wording is more broad, even if they accept an exclusion.
Who is to know if there will be a claim under the new broader wording, or claim declined because of the exclusion? And, is the important piece here that the consumer knew about that risk, OR that they didn’t eventually suffer as a result of taking that risk?
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8 years ago
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