PruHealth has changed its commission model to one that rewards long-term partnerships with brokers.
All Small and Medium Enterprise (SME) new business is now written on a 10:10 commission basis, with 10% initial commission and 10% at each renewal. This commission model is currently only applies to SME business.
Dave Priestly, sales director at PruHealth, called the current market focus on low new business premiums and high initial commissions "unsustainable" and added: "The industry needs to adapt in order to decrease churn and over-commoditising the group PMI market.
"Combined with strong market demand for lower premiums, the combination of claims costs, commission costs and operating costs, outstrip the premiums being charged.
"As a consequence, renewal premiums are forced up, resulting in more companies looking to switch or reduce their PMI cover."
PruHealth said new model is designed to reward long-term relationships by offering level commissions, enabling PruHealth to protect future premiums and remain competitive over the long-term.
Brokers who sign up to the partnership scheme could be eligible for ‘portfolio commission', offering the potential for a quarterly new business commission uplift of up to 20% dependant on their portfolio retention, portfolio loss ratio and new business API.
