Chatswood serves the life and health insurance sector in New Zealand with market intelligence, data, and bespoke consulting services. Some of these are provided in conjunction with Quality Product Research Limited - a subsidiary that brings you Quotemonster.
We believe that good decisions are more likely to occur when we have good information about the market environment in which we operate. Intuitive leaps and creative decisions are always required, of course, but the more they are based on a firm foundation of observation, the better they tend to be.
Quarterly rate review results in rising premiums at nib
nib has reviewed its health insurance premiums. Current members’ premiums are reviewed annually at their policy anniversary, with the increases ranging from 9% to 16%, as per below.
Premiums for prospective new members will be updated from 1 April 2024, with new rates being automatically updated in nibAPPLY.
You can find out more in their frequently asked questions here.
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Submissions call for rewrite of FMA’s draft guide about outcomes focused regulation
The Financial Markets Authority (FMA) has released the submissions relating to it’s draft ‘Fair outcomes for consumers and markets’ guide. Chapman Tripp and Dentons Kensington Swan submissions have been released and both critique the guide.
The Financial Markets Authority (FMA) has released the submissions relating to it’s draft ‘Fair outcomes for consumers and markets’ guide. Chapman Tripp and Dentons Kensington Swan submissions have been released and both critique the guide, with both law firms arguing that implementing outcomes-based proposals will impose confusing and expensive compliance duties of market participants – with no legal basis.
Criticisms include the guide being unclear on how outcomes focused regulation supports regulatory compliance; the draft guide being too vague to be readily applicable; the lack of tying high level outcomes back to actual legal requirements; and some of the draft guide lacks the authority of Parliament and risks being unenforceable or amendable to judicial review.
Suggested improvements include clarifying the scope and targeted market sector of each proposed outcome; providing detailed examples of how businesses can comply; adding more examples of expected compliance behaviour; and identifying when compliance with existing legislative requirement is sufficient to ensure delivery of fair outcomes.
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Southern Cross Health Insurance appoints Cath Lomax to Chief People and Strategy Officer
Southern Cross Health Insurance has appointed Cath Lomax as its Chief People and Strategy Officer. Lomax joins from Fisher Funds, where she was the Chief Client Officer.
Nick Astwick, CEO of Southern Cross Health Insurance said
“As well as being in the business of health, we're also in the business of people – be it serving our members or our people. Cath brings to this role a wealth of experience which will undoubtedly allow us to build on our reputation for being a great employer.”
Lomax was recently awarded the Auckland Emerging Director Award from the Institute of Directors Auckland branch for her work at Surfing NZ.
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Asteron Life sees uptick in lapse rates
Asteron Life’s executive general manager Grant Willis spoke to Good Returns about increasing lapse rates, levels offerings and changing adviser profiles.
Asteron Life’s executive general manager Grant Willis spoke to Good Returns about increasing lapse rates, levels offerings and changing adviser profiles.
Anecdotally, advisers are starting to see more household budgets under financial pressure. Willis said Asteron Life is seeing more cancellations and alterations to policies to reduce premiums and/or scale the sum insured back, despite having one of the best lapse rates in the industry. Willis highlights the importance of product flexibility during times such as these, with Asteron Life customers being able to pick different levels of cover, level of yearly renewable term and even the availability of inbuilt premium holidays that customers can take under specific pressure.
Willis talks about how he’s seeing a lot of new advisers coming though, younger people and perhaps people in second careers, plus children following their parents into financial advice.
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The FMA had an almost $6 million surplus for the 12 months to June 30
AMP settles with Australian financial advisers for A$100 million
AMP has settled a legal dispute with hundreds of Australian financial advisers affected by unilateral changes to buyer-of-last-resort (BOLR) terms.
AMP has settled a legal dispute with hundreds of Australian financial advisers affected by unilateral changes to buyer-of-last-resort (BOLR) terms. After a long-running legal dispute AMP has settled, with no admission of liability, for A$100 million.
In August 2019 AMP made unilateral changes to adviser contracts that meant BOLR multiples were cut by almost 40%, from 4 times recurring revenue to 2.5 times (excluding grandfathered commissions).
In July an Australian Federal Court decision found AMP erred in altering the buyer-of-last-resort terms for two advice businesses operating under its brand. Justice Moshinsky ruled in favour of the two Australian advisory firms who bought suit, awarding Equity Financial Planners A$813,000 and Wealthstone A$115,000 and opening AMP up to 120 or more similar claims. AMP lodged an appeal in October but opted to settle following a mediation process in November.
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Fidelity Life release financial results
Fidelity Life has released its annual report and financial results for the year ended 30 June 2023.
Fidelity Life has released its annual report and financial results for the year ended 30 June 2023. Highlights include:
· Insurance premium revenue of $450.4 million, up 33% from FY22
· Total comprehensive income (net of tax) of $3.2 million, an improvement from their FY22 loss of $24 million
· Underlying profit, excluding the impact of government bond rate changes (net of tax), of $19 million
· Claims paid out in FY23 $209.7 million, up 27% from FY22
· 304,867 customers
· Market share of 15.7%
Fidelity Life resumed payment of dividends, with Fidelity Life’s shareholders receiving a full-year dividend of $8.013 per share. The dividend is unimputed as the Group continues to utilise brought forward tax losses.
Fidelity Life Chair Brian Blake says
“We expected the benefits of our Westpac Life acquisition to start materialising in FY23, and that’s proven to be the case. Our performance shows the business is in good shape and proving resilient against a weak economy and the high cost of living.
…In response to adviser feedback, we’re introducing a raft of new initiatives spanning the digital, product and service spaces to make it easier for advisers to do business with us, focus on growth, and together take our respective businesses to the next level.”
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AIA updates the benefits of its living products
AIA has released a raft of changes updating the benefits that apply to its living products covering critical conditions, progressive care, life cover, and family protection, including changes to selected closed Sovereign, TotalCareMax, AIA Trauma and AIA Life Cover products.
Some of the key changes, which are applicable to new claim events on or after 10 October 2023, include:
· The minimum coverage age for standalone children’s trauma has been lowered from two years to three months.
· Extension of the life buyback reinstatement period from 30 to 60 days.
· Removed the benefit for new business that pays on the diagnosis of medically or occupationally acquired HIV, and introduced a new benefit that pays on the diagnosis of advanced AIDS – regardless of transmission method.
· Changed the terminal illness definition to clarify that life expectancy is less than 12 months, despite all reasonable medical treatment.
· Increased bereavement support benefit from $15,000 to $25,000 in cases where there is joint policy ownership.
· Removed the 5% limit to pay up to $20,000 as an early payment if the life assured dies overseas to return their body to either New Zealand or their home country.
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MAS appoints Matt Harvey as Chief Distribution and Marketing Officer and Craig Ward as Chief Innovation and Digital Officer
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Jon-Paul Hale believes some providers are asking advisers for too much
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Accuro and Unimed have announced a proposal to combine
The boards of Accuro and Unimed have signed a Letter of Intent to transfer the Accuro insurance portfolio to Unimed and to combine the two not-for-profit mutual societies. The proposal is subject to regulatory approval from the Reserve Bank of New Zealand and support of Accuro members.
If the merger goes ahead, UniMed would become the country’s third largest medical insurer with over 140,000 member customers.
Accuro’s Chair Marion Guy says
“We believe combining the resources and capabilities of the two societies creates a more sustainable and resilient health insurance offering than Accuro could offer alone.”
Unimed’s Chair Peter Tynan says
“This proposal will provide opportunities to create efficiencies and develop new services and products – something that will be increasingly important given increasing costs and demands for health services.”
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Financial Advice NZ Nelson/Canterbury Regional Meeting 18 October
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FMA files court proceedings against MAS over fair dealing provisions breaches
MAS self-reported that it had multiple failures between 2014 and 2022:
Failure to apply the correct inflation adjustments to 6,297 customers
Failure to apply multi-policy discounts affecting 8,864 customers
Underpayment of life and disability claims affecting 104 customers
Failure to apply no claims bonuses correctly, affecting 1,235 customers
MAS’s failures were due to errors and deficiencies in its systems, including data entry errors by MAS employees. MAS has been co-operating with the FMA through its investigation.
The FMA is seeking a declaration that MAS contravened the FMC Act and a pecuniary penalty.
MAS has rolled out an unclaimed monies register in support of their remediation process to correct pricing and payout errors. While most affected clients have been compensated, the register encourages impacted members who haven’t been contacted to get in touch to receive their refund.
Jason McCracken, MAS chief, has apologised to members.
“As a mutual, MAS takes the trust our Members have in us very seriously and we apologise for the impact these errors have had. We remain committed to finding any issues and making them right.”
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