Product News 03/08 – NRMA launches a hybrid
NRMA has rolled out a new income protection policy which makes use of agreed value and indemnity contracts within the same policy.
The product will offer an agreed value for the first 12 months of a claim and then become an indemnity policy for the remainder of the claim.
An agreed value contract is based on income at the time of taking out the policy while indemnity contracts are based on income at the time of disablement.
The reason for creating the product is, according to NRMA income protection financial services manager Richard Dunkerley, agreed value contracts can pay a customer more in benefits than they were able to earn while working.
"In some cases this creates the situation where the claimant may be healthy enough to return to work but are still receiving a payout from an insurer. If this payout is greater than the usual income any incentive to go back to work has been removed," Dunkerley says.
However, the NRMA says the average claim length is nearly seven months and this new policy will give most customers an agreed value policy while protecting the insurer from long term agreed value claims.
"This hybrid approach is something which is unique and we believe it provides a fair deal to, and will not affect average, genuine claimants and protects the industry," Dunkerley says.
At the same time, NRMA has included mental illness and chronic fatigue syndrome in the policy up to a time limit of two years. If the client is hospitalised by these illnesses, the limit no longer applies.
Dunkerley says the key driver behind the new product was pressure from its customer base.
"We have a huge customer base and a distribution channel that is not shared with other insurance companies. At the same time there was a demand for new products and we decided to broaden the range, income protection was the obvious choice," Dunkerley says.
The new product will not be made available outside the NRMA branch and intermediary network for the present, he says, but will complement other new products including a stripped down policy which only has death coverage without trauma or disablement.
Latest releases:
A Federal MP is hoping to start a regional pooled development fund (PDF) that will invest in specific industries operating in the western suburbs of Melbourne.
Nicola Roxon, the member for Gellibrand which covers the inner Melbourne western suburbs, wants the fund to help small-to-medium sized enterprises in industries such as logistics and distribution. The western suburbs have become the distribution hub of Victoria in recent years. Roxon's initial approach has been to write to all people attending a recent economic summit in the west. This has produced about 20 responses from people saying they are interested in helping set up the PDF. Roxon hopes eventually to attract investment from superannuation funds, both corporate funds from firms operating in the west, and individual investors.
Deutsche Asset Management has teamed up with the NSW Local Government Superannuation Scheme for the launch of a private equity fund investing in parts of Sydney and regional NSW. The Regional Development Trust is initially seeking to raise $130 million to invest in a range of private and public sector businesses, from telecommunications to business start-ups. The super fund has committed between three and five per cent of its funds under management to the fund.
Challenger International is looking to join Colonial First State in the hot biotechnology managed investments market with the intention to raise up to $40 million through the soon-to-be listed BioTech Capital. BioTech Capital will invest in Australian biotechnology focusing an areas such as genomics, proteomics, medical devices bioinformatics and enabling technologies.
The investments of BioTech will be handled by Challenger subsidiary Challenger BioTech Management. Challenger will draw on advice by Foursight Associates whose principals include Sir Gustav Nossal, Professor David Pennington and Graham Mitchell. The minimum investment for the fund is $2,000.
Rothschild has rolled out yet another Putnam Investments international fund in its bid to expand its multi-style capabilities. The Rothschild Discovery Global Superannuation Trust is to be marketed through super funds, master trusts and wealthy individuals with a minimum investment of $100,000. The fund will be managed using Putnam's so-called "Core" style which combines top down analysis of countries and sectors and bottom up stock selection. The fund produced returns of 36.4 per cent per annum for three years to April 30 in its US guise of the Putnam Global Core Equity portfolio.
AUTHOR
Jason Spits
Recommended for you
Sequoia Financial Group has declined by five financial advisers in the past week, four of whom have opened up a new AFSL, according to Wealth Data.
Insignia Financial chief executive Scott Hartley has detailed whether the firm will be selecting an exclusive bidder for the second phase of due diligence as it awaits revised bids from three private equity players.
Insignia Financial has reported a statutory net loss after tax of $17 million in its first half results, although the firm has noted cost optimisation means this is an improvement from a $50 million loss last year.
With alternative funds being described as “impossible” for fund managers to target towards advisers without the support of BDMs for education, Money Management explores the evolving nature of the distribution role.
