Altrisk (Pty) Limited (Altrisk) held the Johannesburg leg of their annual broker road show at Monte Casino yesterday. In a well attended function the company revealed a number of innovative changes to their product line up.
The company motto is "the uncomplicated approach to life insurance" and one of their key focuses is to keep the business as simple as possible. To this end, the product range is compact, the paper application process painless and the quotation system easy to use.
Solid local and international backing
Local company, Hollard Insurance, holds a direct interest of 49.9% in Altrisk. During his presentation, Chris Harding, CEO of Altrisk, stressed that Hollard continues to show strong growth in premiums earned and number of policyholders in recent years
Altrisk is showing similar growth. The company already provides some R70 billion in cover to more than 30, 000 policyholders. Growth has been assisted by the somewhat 900 new brokers who added Altrisk products to their books in 2006. Harding thanked the brokers in the audience for their strong support over the last five years.
Further confidence in Altrisk stems from the fact that 78% of their re-insurance requirements are met by Hannover Re. Hannover is an international insurance player with gross written premiums of some Euro 10 billion.
New products, less exclusions and a broker loyalty programme
Management made a number of attention grabbing announcements at the road show. One of these outlined a new Altrisk product called 'Flexible Cover'. This allows a policy to be sold to provide flexible cover of up to R5 million for a private individual and up to R20 million for business.
The policyholder decides how much of this cover he requires at a given time and in which products this cover should be vested. Changes to levels of cover will result in reduced or increased premiums but the real magic is the insured will not have to undergo further tests or application processes to raise or lower his cover within the flexible amount.
Another innovation was a direct challenge to larger insurance companies regarding suicide exclusion clauses. Altrisk will do away with the 24-month suicide exclusion clause on policies transferred to its books. They will honour the time lapsed on existing policies brought over. This means a client who held a policy for a year at a previous institution will only have 12-months to run on the exclusion clause in the new Altrisk policy!
Altrisk also revealed a broker loyalty plan which seeks to reward brokers for volumes of business and length of service. Top brokers will find themselves in the 'Chairman' category and will benefit from additional communication with company 'trouble-shooters' and quicker administrative assistance amongst other perks.
Becoming a serious player in the insurance sector
To make sure their policies are in line with international best practice, the group invited Hannover Re to conduct an audit of policies issued by Altrisk. This audit covered a very comprehensive 509 cases sighting only 2 variances.
One of the distinguishing factors between small and larger players in the insurance industry is the quality of their respective books. When Altrisk started out, nearly all of their business was considered substandard insurance.
To understand the difference between standard and substandard insurance, we quote from a February 2000 news release from the Life Offices' Association: "The standard risk pool refers to people with no medical conditions that adversely affect their mortality. They will pay normal premium rates for the product involved. All substandard risks, in other words those with an expected increased mortality, need to pay an actuarially calculated premium loading in line to the added risk of the case in question."
Today the split between standard and substandard business at Altrisk is closer to 50 % each. Harding said "this proves that people really are starting to regards us as a partner of choice."
Editor's thoughts:
There were hundreds of financial advisers and brokers at the Altrisk road show. We would love to hear your views on the new flexible cover product and your thoughts on the changes to the 24-month suicide exclusion clause. Send your comments to gareth@fanews.co.za
Get the latest issue of FAnews