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Jenny Ruth

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Insurance

OnePath's share of new business falls as lapses soar

Tuesday 22nd of November 2011

The latest Investment Savings and Insurance Industry Association (ISI) figures show OnePath's new business in the individual term, trauma, replacement income and lump sum disablement product categories fell to $6.7 million in the three months ended September or 14.8% of the total new business in those product categories.

That's down from $6.9 million, or 16% of the total, in the June quarter and down from $8.5 million, or 17.7%, in the September quarter last year.

OnePath is still bringing in the second highest amount of new business behind Sovereign.

Its surrender rate in the latest quarter was 18.5% on an annualised basis, up from 15.8% in the June quarter, and below only Kiwibank's 20.6% rate - Kiwibank's new business in the quarter was just $0.6 million, or 1.4% of the total.

By contrast, market leader Sovereign had the lowest annualised surrender rate of 10%, unchanged from the June quarter. Sovereign's $11.9 million in new business in the September quarter accounted for 26.4% of the total. While that's down from the $12.4 million, or 28.7%, in the June quarter, it's up from $8.9 million, or 18.5%, in the September quarter last year.

Second largest player AMP and AXA combined saw their share of new business ease to $4.8 million, or 10.6% of the total, from $5.1 million, or 11.7%, in the June quarter and from $15.4 million, or 19.4%, in September last year.

The combined AMP/AXA annualised surrender rate stood at 11.9% in September.

Fidelity had a strong September quarter, raking in $4.8 million in new business, 10.7% of the total, up from $2.6 million, or 6%, in the June quarter and $4.7 million, or 9.7%, in the September quarter last year.

Fidelity's annualised surrender rates was 13.2% in the September quarter, up from $11.5% in the June quarter.

AIA's share of new business at 7.4% in the September quarter was an improvement on its 6.8% share in the June quarter and 6.2% in the September quarter last year but down from 9.9% in the December 2010 and March 2011 quarters.

Westpac's 7.6% share of new business in the September quarter was down from 8% in the June quarter but well up from 5.3% in the September quarter last year.

Comments (7)

Geoff Aylward

In light of these figures I will now reconsider my offer to buy Partners Life in 2016.

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13 years ago

Giles Thorman

This REALLY should have the FMA and any other Government body interested in looking after the interests of the General Public starting to look. There is a very nasty whiff of hypocrisy emanating from Hurstmere Road, I heard on the grapevine that Jeremy personally delivered 30 twisted proposals from his company to Naomi that been sent to his company by mistake; they were meant to be going to Partners Life. It leaves a very sour taste in the mouth to anyone interested in the long term well being of this industry.

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13 years ago

Craig Knox

Its great to see some analysis on the ISI figures - keep it up. Maybe you could do some deeper analysis with an objective analyst to supplement. I for one believe that OnePath has navigated well through the last year with the massive disruptions that Naomi's departure caused (staff jumping ship, rumours and advisers pulling customers) Good on the team there for staying focused as it would not have been easy. The industry needs competition and quality underwriters of which they are one. They look well placed to fight out with AMP/AXA for the number 2 position. That can only be a good thing for advisers and customers - lets drop our focus on PartnersLife as they live by feasting on advisers churning their books - I would rather we talked about how we can grow the market by bringing in new customers and markets

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13 years ago

Giles Thorman

Well done OnePath indeed, they are fighting a battle against wholesale attacks on their book of business by predominantly Partners Life who previously when they worked at OnePath condemned such behaviour. The thing that worries me is that Partners will just sell up in a few years before all the problems start coming through and the agents responsible will likely be long gone as well. Not a good look for the Industry as a whole. As Craig suggested I think most would like to see the market grow with new clients, but pretending that churn is not occurring will not make it stop; pressure needs to be brought from every angle on Partners to stop actively or passively encouraging the practice; pretending it is not happening will not make it go away either.

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13 years ago

andrew smith

I’m a Newpark member and I’m way too busy writing new business generated from the lead programme's and the new initiatives that Newpark has in place to worry about twisting business. Does anyone need some new people to see? I have more than I need.

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13 years ago

Simon Rule

No surprise to read here that OnePath is losing business now. Despite the recent road show promises made their constant under resourcing will only continue. Of this I have no doubt with ANZ Bank holding the purse strings. The same old “shareholder profit first" banker’s mentality is well and truly at play now. What a crying shame as OnePath has some excellent products. Advisers will only tolerate poor service for their clients for so long especially if more efficient providers with better products have since arrived on the scene. I agree with service your clients or else comment's above, those advisers who are happy to simply let their clients remain with providers who don't update their products etc need to start remembering at the end of the day it's all about our clients interests - not ourselves!

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13 years ago

Natasha Silvestri

Interesting how Partners is being vilified by some commentators for "encouraging" churn. They are doing nothing different from all the other Life Companies which pay up-front commission. I don't use them - yet, but as far as I know they do not approach other companies policyholders directly, independent advisers do that. If they receive an application for insurance they are bound, like any other company to deal with the prospective clients request in good faith. No Life Company (unless it is also the adviser) is in a position to determine whether the application by the client is in the clients best interest, that is for the client and the adviser to determine. It is us advisers who are responsible for "churning" clients to companies with better products or premiums and where this is in the clients best interests it is our legal duty to do so. While everyone has a general duty to look after the best interests of all stakeholders, advisers are not responsible for keeping clients with any particular company - their only duty is to look after the best interests of their clients. Are commission arrangements designed to encourage advisers not to move their clients, possibly to the clients detriment, justifiable? As a client I'd be just as unhappy with an adviser who moved me only for commission reasons as one who did not move me for commission reasons.

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