Product providers are measuring and rewarding factors such as levels of disclosure on business submitted to them by IFAs, according to Pacific Life Re.
The firm, says providers, driven by extreme competition in the protection market, have started rewarding IFAs based on overall quality of business.
Chief underwriter Warren Copp says: “Completion and persistency rates are key and are receiving far greater focus than in the past as these play a major part in profitability for insurers. Another more subtle proxy for business quality receiving increased attention is the level of underlying non-disclosure.”
Copp says some providers have already started to adjust the commission they pay to advisers in a bid to encourage more business from firms they view as more attractive and adjust the business they get from less attractive companies.
He adds: “This means that intermediaries with good completion and persistency rates and high levels of disclosure should ultimately benefit.”