In a note sent to its partners earlier this week, the pan-European insurance company said sales of its Vision plans with premium payment terms of below 10 years had grown as a proportion of its overall sales mix but were unprofitable.
“Sales of Vison Plans with terms below 10 years are loss making for Generali PanEurope. These types of sales are making up an increasing proportion of the overall sales mix so this is becoming a bigger problem,” the memo said.
Commercially unviable
Chris Ennis, chief commercial officer of Generali PanEurope told International Adviser that pricing and commission levels for all its products were under active review.
“We are proposing to reduce the commission paid on sales of our Vision product in respect of plans with terms of 5 to 9 years. Sales of plans with these terms represent a very small percentage of total Vision sales and are not commercially viable at current rates of commission,” Ennis said.
“Our proposed implementation date for this change in commission payment is Q3 2017. The commission payable on Vision Plans with terms of 10 years or more will remain unchanged,” he added.
One IFA contacted by IA about the proposed commission change said it appeared that Generali was “incentivising the sale of longer term plans over shorter ones”.
When implemented the initial commission payable on the sale of all Vision Plans with premium payment terms of below 10 years would be at a rate of 2% times the number of years in the premium payment term (N) times the annualised premium.
At present, initial commission payable on the sale of all Vision Plans is paid at a rate of 3% times N times annualised premium.
Generali PanEurope, also confirmed there would be no impact on the plan holder or on the product literature as all plan related charges will remain unchanged.
Generali markets its Vision plans as offering a wide range of investment options from leading fund houses along with other benefits including increased allocations for larger investors and loyalty rewards for consistent savers.
