PruHealth Introduces New Sustainable Commission Model

By Pruhealth, PRNE
Wednesday, June 22, 2011

LONDON, June 23, 2011 -


 

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.

Notes to editors:

*10:10 commission applies to SME business only

**Portfolio commission (Measured per calendar month)

About PruHealth:

PruHealth, the href="www.pruhealth.co.uk/insurance/advisers">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 href="www.pruhealth.co.uk/insurance/advisers/work_with_us">PMI
adviser, href="www.pruhealth.co.uk/insurance/advisers/our_products/our_products_bh">
small business health cover, href="www.pruhealth.co.uk/insurance/advisers/vitality">company
health insurance benefits and href="www.pruhealth.co.uk/">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

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