The latest entrant to the Australian life insurance market, PPS Mutual, has accredited 80 financial advisers to provide advice on its suite of insurance products with plans to accredit a ‘few hundred advisers’ over the next five years.
PPS Mutual, Chief Executive, Michael Pillemer said the 80 advisers were located in Sydney, Melbourne, Brisbane and Perth and had been chosen because they offered a strong client experience and work within a specialist market, with most coming from non-aligned licensees.
PPS Mutual first announced plans to offer life insurance products into the Australian market in February of this year, specialising in white collar professionals in the medical, commercial and legal, and industrial sectors.
“We have chosen a distribution strategy that has focused on accrediting advisers to use our products and we believe professionals need professional advice, so we will not be offering any direct distribution,” Pillemer said.
“The accredited advisers have been trained to understand the mutual model and how the profit sharing arrangements work for those insured, as well as the product design and have undertaken an exam at the end of that process to gain accreditation.”
Pillemer said the number of professionals covered by the targeted sectors was more than 500,000 and as such PPS Mutual was likely to add advisers aiming for a target of a “few hundred in the next five years”.
Advisers using PPS Mutual products, which include Income Protection, Life, Trauma and TPD, were able to charge fees or commissions for their insurance related advice, Pillemer stated, with the latter being offered at levels in line with the proposed Life Insurance Framework (LIF).
“The timing is right for this because there has been a complete lack of innovation in the Australian market…”
“The clients of the accredited advisers may have complex needs so we will offer remuneration that is appropriate for the adviser and the client and we set that at a time when it looked as if the LIF would be put in place,” Pillemer said.
Business Expenses, Blood Borne Disease and Child Insurance would also be offered alongside the four life insurance products, which have all been created from scratch in conjunction with Australian insurer NobleOak, South African group PPS SA and a large global reinsurer.
Pillemer said the insurance products were released via a soft launch last month and the group’s contemporary mutual model has continued to attract interest from financial advisers.
“The timing is right for this because there has been a complete lack of innovation in the Australian market with changes only taking place around pricing or some product innovation at the margins,” Pillemer said.
“Advisers are looking for long term alternatives and solutions for clients and the mutual model we offer is not subject to the vagaries of the market like the listed insurers who have external shareholders. Instead it offers an alignment of interest between the members of the mutual and the life insured as they are effectively the same person.”
