Aon Financial Groups have reported a substantial reduction in lapses and other benefits after the first six months of its Preferred Partner Program.
Commencing from 1 January 2009 after a lengthy due diligence process, Aon’s efforts have been rewarded by across-the-board improvements in areas such as:
- New business volumes
- Lapse ratios
- Underwriting efficiencies
- Claims payments
- General service standards
Aon Head of Alliances, Tony Lye, said the dealer group (representing Aon Financial Planning & Protection and Aon Wealth Management) has been delighted with the initial success of its Program, which has seen lapse rates reduce by around 1.5% in the first six months.
Mr Lye said the benefit of a formal Preferred Partner arrangement has meant a more concentrated focus on making the relationships work with each of the six life company providers, in what is a reciprocal benefit.
However, while Aon has acknowledged the promising outcomes in the first six months of the Program it also indicated that its advisers were having mixed experiences in dealing with some of the six life company partners. According to Mr Lye, those companies who have adjusted the nature of their service model to best reflect the needs and requirements of the Preferred Partner Program are the ones who have seen the best results in terms of increased levels of new business submissions.
In addition to increased new business volumes, other practical benefits of the Preferred Partner Program include:
- Much better ‘pro-active’ responses from most life company partners to advisers’ underwriting or claims issues
- Availability of extensive technical expertise and resources to assist Aon train and develop its national force of over 200 financial advisers and other support staff
- Partner insurers will often take more time to explain reasons for certain product or service decisions rather than adopt what may previously have been a ‘veiled silence’
- Heightened and genuine focus on reducing lapse rates
- A more ‘collaborative’ approach between dealer group and life company towards addressing current issues and developing future opportunities
Aon Senior Manager - Strategic Growth & Planning, William Chun, reinforced Mr Lye’s comments about the early success of the Program, observing that the nature of the Preferred Partner Program in itself has led, in most cases, to an enhanced relationship between distributor and service provider, with both Aon and its life company providers regarding their arrangement as a mutual partnership rather than simply another dealer group with a restricted list of product suppliers.
