Pinnacle Life received notification of a complaint recently that was made to the Advertising Standards Authority.

The complainant (Tom of Auckland) took issue with Pinnacle Life’s assertion that Pinnacle’s 20% lower premiums are due to the fact that they operate “more efficiently” than the other insurers.

Tom’s complaint was based on his view that Pinnacle Life’s lower premiums have little to do with better efficiency, and instead, provided these two reasons for Pinnacle’s lower premiums…

• Pinnacle Life pay little if any commission to brokers to provide advice to clients…  so they save on commission costs and
• Pinnacle Life doesn’t underwrite people applying for life insurance… it relies on the work done by previous life insurers, thus avoiding significant costs.

Both of these points are, of course, nonsense…

Let me explain.

• Firstly, Pinnacle Life spends proportionally more on advertising, so commission costs are simply replaced with increased promotional costs.
• Secondly, Pinnacle Life underwrite every application received. Any suggestion that Pinnacle Life doesn’t undertake its own underwriting is simply a myth.
• Finally, here’s why Pinnacle Life’s premiums are the lowest in the industry… over 60% of policies are issued without touching a human hand (other than the insured person), and without filing a single piece of paper. It’s called ‘efficiency’ Tom.

Unsurprisingly, the Advertising Standards Authority rejected Tom’s complaint.

We copped some flack this week for standing up for policyholders whose premiums are about to be increased by some life insurance companies. The flack from some professionals in the industry was a little unfair, we thought, with some comments bordering on what we would regard as ‘myths’. I’d like to bust a few of them…

Myth 1

Pinnacle Life sources it’s new business by somehow ‘piggy-backing’ off the hard work of other insurers…

Busted! Pinnacle Life spends significantly on radio/TV advertising and employs its own underwriters and administration staff… fair to say that Pinnacle Life pays its own way for its new business.

Myth 2

Consumers that buy insurance from Pinnacle Life don’t understand what they’re buying…

Busted! It’s patronising to suggest consumers are illiterate and can’t understand a straightforward policy document, particularly when Pinnacle Life won the NZ WriteMark plain English Award in 2009 for its clear and understandable policy wording. We think consumers are smarter than that.

Myth 3

An adviser that switches a policy to Pinnacle Life to achieve a 20% saving for a client, while earning a 75% commission is “shameless”…

Busted!  If that adviser is shameless, what do you call an adviser that switches a policy to achieve a 5% saving for a client and then pockets a 220% commission?

Myth 4

Pinnacle Life’s only point of difference is price…

Busted! Besides offering the most competitive prices in NZ, life insurance policies from Pinnacle Life are jargon-free, straightforward and relevant… and can be purchased online in less than 10 minutes…

Pinnacle Life receives a lot of feedback from consumers - some great and some querying the benefits of buying life insurance online. 

Any business breaking new ground is likely to encounter consumers that are cautious and conservative – and reasonably so.

Q

“It is interesting to see an online option for Pinnacle Life. However, a few life insurance company I’ve contacted have provided me with reasons not to go with this sort of arrangement instead highlighting their plus points of:

* Point of presents = established support

* Payability in the event of an incidental = supported by past records, etc.

* Pinnacle Life being relatively new and may have issues/supporting the client since it’s be reinsured with Hanover Re and not directly and any issues cannot be decided on Pinnacle (Pinnacle being sort of the middle man in the process) but instead would have to go back to Hannover Re. 

What are you thoughts on this? And why is choosing Pinnacle Life better than the traditional providers?” 

A

·       Try testing the ‘actual’ support you get from a ‘traditional’ insurance company and compare your experience by calling Pinnacle Life on 0800-22-22-23. The result may surprise you. 

·       Pinnacle Life are proud to have paid every valid claim it has ever received. 

·       Pinnacle Life is a registered insurance company – not a ‘middle man’ – and its been around for 10 years. Your policy is insured directly with Pinnacle Life. Pinnacle Life in turn reinsures each policy with Hannover Re… no different from any other NZ insurance company. 

·       People buy life insurance from Pinnacle Life to get a policy they can understand, to get it online within minutes and to save around 20% on the price.  

Our advice is to make up your own mind.  

As people who work in the life insurance industry well know, one of the biggest assets a life insurer has is the relationship it has with its ‘reinsurer’.   

Pinnacle Life’s relationship with its reinsurer, Hannover Re, stretches back 10 years.   

The Hannover Life Re underwriting team based in Sydney were instrumental in the development of the Intelligent Life online underwriting system that is at the heart of Pinnacle Life’s breakthrough offering.  In assisting us with our design, we asked Hannover Re to think outside the square, to think ‘innovation’ and to think ‘world first’.   They did.   

We’re proud to be working with this team, without whom we would never have launched.  We’re also pleased the feeling’s mutual.   

This from

   Hannover Life Re of Australasia (HLRA), Australia’s largest Life Reinsurer, are very proud to be affiliated with Pinnacle Life and Intelligent Life – Pinnacle’s internet based insurance application system.  

We have worked closely together with Pinnacle in the development of this revolutionary site, and are very proud to witness the success Pinnacle are having with this. 

We see this as the way of the future for our industry, particularly for Generation C who do not have the time, nor the inclination to deal with the traditional adviser and paper trail that has historically been necessary to obtain life insurance.  

Intelligent Life allows Generation C to take control of their life insurance needs, at their convenience, according to their time constraints, not someone else’s – a must in today’s fast paced consumer environment. We look forward to our continued association with Pinnacle, and to taking Intelligent Life to the next level. 

Tracy Peterson, Chief Underwriter, HLRA  

Since its launch a few months ago, Pinnacle Life has attracted many customer comments remarking on how easy they’ve found the online products and purchasing process.   Some typical comments… 

“Easy to buy, no hassles, no paper shuffling, no broker appointments, a great initiative”.  Kevin Morris 

“I was surprised how easy it was to read and understand the policy”  Maxine Miller

“The product is straightforward and excellent value for money”. Glenn Myers

We’ve had an excellent response to our launch yesterday.   We obviously don’t want to post every comment received (and still receiving), but here’s a couple that represent the tone… 

Just wanted to say congrats on the website. Its fantastic to see someone get online insurance sales right and set a new industry benchmark.I wish you guy’s all the success that this site deserves.Kind regards
Barry Read    May 16, 11:01 AM 

Nice work guys. Good luck with the online business. Martin Gould   May 16, 9:03 AM