The story here is not actually the launch of a new product, but Saga’s opening up of its existing private medical insurance (PMI) plans to brokers. Previously customers could only buy direct.
Saga offers a choice of five health insurance plans, all underwritten by AXA PPP, although unique to Saga. All are designed for customers aged 50 or over. The plans are called Super (highest cover, including full outpatient cover and a range of other benefits), Secure, Saver Plus, Saver and Support (lowest cost as it excludes outpatient except surgical outpatient treatment).
Customers can add extended cancer cover, health cash plan benefits and get cover for pre-existing hypertension at extra cost. Premiums can optionally be cut by agreeing to open referrals, choosing a four week wait option, or choosing one of five excess levels, or choosing to have a no claims discount.
The Saga Health Insurance Introductions process is designed to be simple Saga says. Brokers are assigned a personal introducer code and have access to the Saga Health Insurance customer team through a direct broker referral process. Once referred, the Saga team will then contact the customer and create personalised quotes based on their individual requirements.
Brokers do not sell the products, but will receive up to 30% commission for all confirmed, converted sales and can continue to benefit for a further two years if the customer renews their policy. The initial commission varies from 20% for 1-20 sales, up to 30% above 40 sales or 5% higher if the broker takes no renewal commission. If a client cancels their policy within a specified time frame, Saga reserves the right to claim back any commission paid on a pro rata basis.
During trials of the arrangement, Saga says it achieved a quote-to-purchase conversion rate of over 40% and with an average annual premium in excess of £1,700.
What They Say
Head of health marketing and sales development, Simon Hanson, said: "Saga Introductions is being opened out following a successful trial and has been developed to create an easy and rewarding process for brokers to introduce new clients to us.
"In recent years the health insurance market has seen a lot of consolidation and with the recent withdrawal of April UK, there is less choice for customers and brokers. This is a great time to open up our cover and provide brokers with a new option and the opportunity to introduce their clients to our high-quality cover and service."
What We Say"Many protection advisers shy away from selling PMI, arguing either that they don’t have the expertise, or even that PMI premiums can be in direct competition to premiums for other types of protection cover. Some simply introduce clients who want health insurance to a trusted PMI specialist.
"Now, Saga opens up a third route – an introduction to Saga. The brand will certainly be known to older clients, while the plans are run by AXA PPP – another blue chip name in the market.
"The rewards for doing so can be attractive, with commissions up to 30% (35% if no renewal commission is taken).
"The downsides? The big loss to an adviser or broker is in effect the customer, as Saga takes over selling to them. The right product for a particular client may also not be a Saga plan and commission is only payable for a couple of years.
"However, introducing clients to Saga is straightforward and the adviser can (indeed, must) then leave the selling entirely to Saga. Saga’s figures show a pretty good conversion ratio in trials and, for the adviser who simply turns away PMI enquiries at present, this could be an additional line of income – but only for individuals over 50, and the plans are not available to SMEs or groups."