Changes to ClearView LifeSolutions Pricing

Citing higher expected IP claim costs, substantial reinsurance cost increases and reduction in interest rates, ClearView announced in mid March it was making changes to the pricing of its LifeSolutions product series effective from April 22.

A statement from ClearView  Managing Director Simon Swanson to advisers on March 12 outlined the unprecedented challenges facing the Australian Life insurance industry and the losses the industry as a whole has suffered.

And, he says, that despite extremely difficult market conditions, ClearView “….has remained profitable to date but looking forward we face higher expected IP claims costs, substantial reinsurance cost increases and the full impact of the most recent reduction in interest rates”.

“As a result, we must make changes to the pricing of our LifeSolutions product series.”

He notes that the industry “…. cannot continue on its current trajectory, which is why APRA has imposed additional Pillar 2 capital charges on Australian life insurers and asked them to undertake measures to stem their losses and improve sustainability.

“We are expecting a wave of premium rate changes to emerge across the industry in the next six months,” Swanson states.

Amongst the changes outlined in a detailed statement are:

New business pricing from 22 April 2020

The statement says that for stepped and hybrid premium lump sum cover:

• Revised pricing for stepped lump sum cover in light of our outlook for claims and overall market pricing
• Base premium rates are being adjusted with some increases and some decreases, mostly in the range of 0-10 percent
• Size discounts have reduced for lower Life and TPD cover amounts and for higher Trauma cover amounts

For stepped and hybrid premium income protection:

• Benefit periods for 1, 2 and 5 years and accident-only are increasing by 10 percent
• Benefit periods to age 60, 65 and 70 are increasing by 35 percent
• ClearView remains favourably priced for base level income protection without the additional extras
• A new ‘Indemnity 60’ option is now available which may be a suitable lower cost option for some clients.

ClearView says it  is providing advisers with a tailored report of their existing LifeSolutions clients and how the new rates may affect individual clients at their next renewal.