Zurich's new definitions of success

Zurich Life has taken gold in the disability income category of the Money Management/Dexx&r Risk Company of the Year awards for 2010.

The win was thanks to the performance of its flagship income replacement product, according to Zurich’s national manager for sales and strategy research, Marc Fabris.

The risk company, which won silver last year in the same category, recently introduced a 10-hour definition into its qualification criteria, allowing policy holders to work up to 10 hours per week and still receive a full month’s benefit, Fabris said.

The 10-hour definition completes the income products’ three-tier definition criteria, with the other two definitions allowing policyholders to qualify for income replacement under loss of income, or an inability to perform one or more work duties, according to Fabris.

“In the market there’s a mixture of definitions, some companies with one, some with two and, more rarely, a three-tier [definition], so we pride ourselves on providing the best chance for a genuine claim to be paid,” he said.

The product pricing is reviewed on a yearly basis to ensure it continues to be stable and continues to deliver for policyholders without major changes in premiums, Fabris said.

“One of the big things with premiums is to constantly review [them] so that we don’t leave it for too many years and all of sudden some segments need to have a big hike to pay for changes in claims,” Fabris said.

Zurich also introduced cover until 70 years of age in July this year, making inroads into the professional and senior white collar market and adding to its strong focus on the medical fraternity, Fabris said.

Zurich pays monthly benefits on a fortnightly basis on claims, allowing benefits to be paid out faster. This feature is well liked among policyholders, he added.

“It’s promoted strongly as being the quality offering in the market,” he said.

Macquarie Life has taken out silver in the disability category for the first time, thanks to its strong focus on innovation, according to Macquarie Adviser Service's head of insurance, Justin Delaney.

“From a disability income perspective, we have features that we built that don’t add to the cost of the product,” he said.

Chief among these was no requirement for a total disability prior to a partial claim of disability income, while policyholders could also increase monthly benefit cover without the need for additional medical underwriting, Delaney said.

The policy could be held inside or outside of a client’s super, giving a great deal of product flexibility between tax structures, again giving greater benefits without increasing the cost of the cover, he said.

The release of Macquarie’s Super Optimiser solution early last year drove much of the changes around the disability income product, Delaney said.

AIA has taken out third place in the category this year, with new features in the disability income product now bearing fruit.

AIA was the first company in the market to introduce optimised premiums, making premiums more affordable for clients as they age, according to AIA's head of product management, Tim Tez.

A severity benefit was also introduced, allowing policyholders to claim an additional third of their monthly income benefit if they are totally disabled after six consecutive months of receiving payments.

“Many of the benefits aren’t claimed straight away, it’s a long-term purchase, so a lot of the innovations we’ve done we’re now seeing the fruits of,” Tez said.

AIA also instituted a no-claim bonus for the product, increasing the amount a policyholder can receive by up to 15 per cent during the first 12 months of the claim. The feature kicks in after three years with the product, he said.