Media release 9 July 2021 Hot on the heels of announcing its acquisition of Westpac Life and a new strategic alliance with Westpac NZ, Fidelity Life has confirmed former SHARE and Swiss Re executive Bronwyn Kirwan as its new Chief Sales...
18 March 2021
Qualifying FAPs will be able to bring forward a portion of their initial commission.
The country’s largest locally owned life insurer, Fidelity Life, has given advisers an early look at its innovative new commission model, including an option for qualifying advisers to be paid a portion of their initial commission at the time they submit new business.
Due to come into effect in July 2021, the new model aims to bring sustainability and transparency to what has historically been a complex area of the life insurance industry.
A central feature of the new model is a commission scorecard. The scorecard will allow licensed Financial Advice Providers (FAPs) to easily calculate the percentage rate of initial commission they’re eligible to receive. The scorecard is based on three key metrics: persistency, in force policy count and conversion rate.
The new model will also allow qualifying FAPs to bring forward the payment of a portion of their initial commission. To recognise advisers’ efforts during the customer onboarding process, FAPs who meet certain criteria can choose to be paid a portion of their initial commission when new business is submitted – meaning the FAP’s advisers can potentially be paid weeks earlier than the current industry-standard practise of payment once new business is issued.
Another change will see the simplification of ongoing commission for new business, with renewal and service commissions to be combined into one rate of 10 per cent and referred to as ‘servicing commission’.
Chief Distribution Officer Adrian Riminton says: “This evolution of our commission model is just one aspect of Fidelity Life’s broader transformation and is designed to help both advisers and ourselves secure a more sustainable future. We know commissions can be complicated, and we’ve redesigned our model to be as transparent and sustainable as possible.”
2021 is set to be another big year for Fidelity Life as it progresses its bold whole-of-business transformation, built on the idea of reimagining life insurance for New Zealanders and aiming to deliver sustainable growth.
“There’s plenty more to come for advisers from us in 2021,” says Adrian. “As our transformation gathers pace and our technology investment comes to fruition, advisers will benefit from access to more great professional development resources and a new adviser portal, including real-time dashboards, to make it even easier to do business with us.”
Fidelity Life welcomed new CEO Melissa Cantell at the end of January, and key transformation projects this year include Project Watson, a new technology platform due for completion in the second half of 2021; and a move to a brand new 6-Star rated green building in Auckland’s Fanshawe Street planned for September 2021.
Full details of Fidelity Life’s new commission model, which will also include a revised spread commission option, will be released over the coming weeks ahead of July.
How Fidelity Life’s commission scorecard works
The scorecard allows each FAP (or, in some cases, an authorised body) to calculate their initial commission rate based on three key metrics. The weighting assigned to each metric is as follows:
1. Persistency rate: 60%
2. In force policy count: 30%
3. Conversion rate: 10%
Media release 6 July 2021 Westpac Group has announced it will sell its New Zealand life insurance business, Westpac Life-NZ-Limited, to New Zealand’s largest locally owned life insurer, Fidelity Life, as part of a long-term strategic all...