A register of all skin cancer cases would provide much-needed data. As our population ages and changes we need to have a better picture of what cancer incidence looks like. We also need to know whether public health campaigns urging people to avoid getting sunburn are working. A register of skin cancer diagnosis would definitely help both of those objectives. It is a classic opportunity for the co-ordination that our national health care system can bring - insurers, incidentally, would benefit from the additional data as well.
New Zealand has not had quite the same experience of the rapid development of one-stop-shops - by which is meant a broad financial services advice business usually extended into real-estate agency plus associated legal services. It is interesting to note that the challenges of running these broad 'horizontal' organisations seem to have overwhelmed anticipated benefits in acquiring and marketing additional services to each customer. Link.
I actually kind of like that news. Since I started following the Harding Center for Risk Literacy I have a new found respect for scepticism about medical matters. Also I quite like the idea that the kind of person I am is not a complainypants but a tougher creature, capable of shrugging things off.
But, if only that were true.
I am in fact a person who does complain a bit about aches and pains, I am a tiny bit sensitive to criticism, and I do keep an eye on my health. The rugged thing is perhaps a bit 'aspirational.' Although I still don't think I'm a complainypants as a person.
While the non-medical sum insured triggers for further tests are high in New Zealand compared to the rest of the world the trigger level for financial information is significantly tougher here - a recent example from the UK suggests:
Zurich in the UK allows a limit of 2million GB pounds before requesting financial information, which is about 74 times the median weekly earnings. link.
OnePath in New Zealand, just to pick a company, allows a limit of $2million NZ which is about 44 times the median weekly earnings.
Fidelity Life risk products can now be quoted to include nib health products. Go to the "Settings" screen to choose either nib's Ultimate Health or Ultimate Health Max to quote alongside Fidelity Life.
Today is all about Total and Permanent Disablement Insurance - as that's what I'm talking about at the IFA conference. Someone obviously gave me the subject because otherwise I would draw too many people ;-)
I heard a business development manager for a major insurer say to me yesterday that advisers won't sell TPD because, they say, 'no one ever gets a claim paid.'
So multiple choice questions: Thinking about how likely a TPD claim is relative to a claim under a life cover benefit is it:
a) about half as likely
b) about the same
c) about 50% more likely
What is the profit experience for insurers on TPD?
Alan Rafe (CEO of Quotemonster) and I will be at the IFA conference tomorrow. I'm running a thrilling session on Total and Permanent Disability ;-) Alan will be undertaking the serious work of trying to say hello to everyone there. Watch out for our pals: Tony Vidler and Mike Barnes who will offer a talk on a high level view of your business and Barry Read who will also be presenting later in the day. Michael Taylor of OMNIMax will demonstrate Statement of Advice writing software as well.
Alan's team has grown and so I am deliberately choosing to spend less time on the Quotemonster business. At Chatswood we are also growing - 8% up on last year - and in particular our quarterly industry review, commission survey, and contract product management services are keeping us very busy. So if you have rating issues, support calls, or inquiries to make about Quotemonster and Quality Product Research, call Alan, Kelly, Beth, or Sara (but don't bother the developers, they are really busy with loads of cool new things for you).
Income Protection Claims and Tax
Three times in the last week - from very different sources - I have heard people talk about clients on Indemnity IP claim that are not paying tax. Clients who have never received before-tax income in their lives may not realise that they must declare this income and complete a tax return. In fact, the belief is that overwhelmingly they do not do so. That is a big danger for them, but also for advisers. The name "financial adviser" means that a client may think it is your job to advise them on tax - unless you make it very clear to them that they need to get advice from their accountant on that. Companies and advisers wishing to stop themselves getting dragged into complaints about a failure to advise on tax issues should advise every new IP claimant on an indemnity benefit that they need to pay tax.
A UK business is to offer lower professional indemnity (PI) premiums for advisers that meet a range of criteria, including having better trained staff and professional body memberships. They will also offer premiums to more closely match the services and level of business being conducted.
Unfortunately this move appears unlikely in New Zealand in the near term. In this market PI premiums are still relatively low, and such mechanisms are not, therefore, really worth it.
Privacy - medical practitioners are taking a tougher line on privacy. Twenty years ago almost any inquiry to a GP was - eventually - responded to with a copy of the client's file. Today after years of publicity for privacy law and some professional soul searching that has changed. Now even copies of file notes will have some information blanked out, narrowing the response to exactly what was requested. But are they leaving out only what isn't required? Or are they removing other data which could subsequently be the cause of an argument over disclosure at claim time? The Privacy Commissioner has made several public pronouncements that insurers should be enquiring specifically in relation to issue that are of potential concern/relevance and not “fishing” generally. An indirect (and possibly unintended) consequence is less disclosure and correspondingly a higher incidence of claim avoidance.
Role - Medical doctors and specialists see their role differently. Go back twenty years and most saw a wider, societal dimension to their role. Today they see their role more clearly as serving the needs of their client: the patient of their practice. That has practical implications. Some insurers see doctors advocating for their clients claim. One calls letters around certain claims 'sandwiches': a letter opens with a plea on the client's behalf, concedes the specific medical information which they know means the claim will be more limited, and then makes a plea on the client's behalf to ignore this in conclusion. Insurers are therefore seeking more independent medical reviews than in the past. This shift probably started in the 1980’s. It was subtle at first but certainly increasing numbers of medical practitioners (especially GPs) see their role as patient advocate rather than a provider of an objective assessment of a generation ago.
Online Resources - Use of social media in claims review has been given some news coverage recently. Facebook has resisted the attempts of social security in the US to obtain information about some clients. Will social media be used in underwriting? One underwriter explained recently that when they receive applications from a business owner they google both the person to be insured and the business in order to get some context for the application. It can also reveal information material to a risk that is not in the application form. Information deemed to be in the Public Domain cannot be non-disclosed even if it is not in the application form. One underwriters tells us that they recently “Googled” an applicant for a large sum assured to find she had been convicted of a significant crime and was awaiting sentencing.
Activity - Underwriting for the elderly has shifted from 'finding out what's wrong with a person' to 'finding out what they can still do.' Such approaches could spread further down the age range. Especially useful in income protection cases for sedentary occupations where many serious chronic conditions can be managed so the client can still work - so motivation to work is an important factor, possibly the single most important factor, and yet it is notoriously difficult to assess. Some people will go to work everyday in wheelchairs and yet there are those who claim for 20 years for back disorders that cannot be seen on an x ray.
Severity-Based Benefits - A concern in Trauma is full payment for even very early diagnosis or very minor events that technically qualify. That has led to tougher underwriting and higher prices. But severity-based trauma can allow other easier versions of the product to emerge. We have seen pricing differentials, and wider lists of events as a result of this approach. But we haven't yet seen easier underwriting. That is an option for product developers to consider.
Our compliance guru is concerned that AML reporting requirements to the FMA may also capture transactions 'arranged' and not actually made. An adviser arranging but not actually making a transaction - helping a client to set up a KiwiSaver plan for example - would need to report that. The 'transactions' thereby captured could include increases. Originally it was thought that if you did not actually handle the money the transaction was not yours to report. The impact could be very large, multiplying the number of transactions that need to be reported by a number of times. You can find out more about the situation by looking at these links:
In New Zealand wee have already been given strong guidance that the word independent is inconsistent with a remuneration model that includes commission.
In the UK the Financial Complaints Authority feels that any form of simplified advice service, because of the limitations that creates (such as limited product suites considered) cannot be called independent.
According to the Harding Center for Risk Literacy, many doctors do not understand statistics, which leads many to overprescribe procedures such as screening services, and other treatments too. This fascinating article by the BBC on the subject provides an easy introduction to the issues. Why try to answer the simple problem included in the article yourself and see how you score? After all, 79% of doctors got it wrong, so you will be in good company whichever way you answer. Link.
Growth is hard. You have to invest money, time, and reputation in something that might not work.
So most people say "I want to grow" but what they really mean is "I want my business to get bigger without me actually doing anything about it."
Sometimes they just stifle their desire for growth with a lack of resources this is the unvoiced: "I want to grow, but I will only spend an hour or two per month and very little money on it."
Sometimes the investment can be substantial: many glorious new computers, spreadsheets, plans, training courses, and lots of getting ready... but no decisive action. This is "I will look like I'm going to grow, but I will only do it if I am absolutely certain."
If you really want to grow you do need a plan. Then you need to work the plan.
The best way to do that is to make yourself accountable to someone for the actions on the plan. If you have been planning to grow these last ten years and you haven't, then perhaps now is the time to get some help. Find people that grew and buy them a fabulous lunch and ask them what they did. Find the people that helped them and ask them for help. Stop judging all the things you have never tried and "just know don't work" and start applying some of the science of management to your work: create/revise, test, measure, repeat.
Take a course. Talk to people. Make a plan. Then do it.
The new disability claims model is available for research users. This gives subscribers to research an insight into both the basic claims model we use for rating and several scenarios in the detailed claims model which can be used to compare every payment item under an income protection contract.
The three scenarios we pick highlight the different performance of Agreed Value, Indemnity, and Loss of Earnings products. It also shows some great results for total replacement ratios and the value of back to work and partial booster features.
You can access the Disability Claims Model through the research tools area as shown in the menu below.
Urbanisation is directly correlated with a dramatic reduction in the suicide rate in China. Several countries have recorded reductions in suicides and China is not alone in finding that giving more choices to women reduce their rate of suicide a great deal. Those choices include being able to choose who you marry - or not - and what kind of work you do.
The UK saw a similar effect as divorce laws were liberalised in the second half of the 20th century. Another common thread is the value of making it harder to actually commit suicide in the midst of depression. The UK saw a reduction in overdoses through the spread of blister packs for pills. Whereas China has reduced the toxicity of pesticides. Link.
The phrase 'hostage to fortune' is a pretty good description of how a parent views their growing children. We encourage, coach, and occasionally correct and hope for the best. Over the years I have had a few rushes to the hospital and anxious waits. Chris Daems describes one such situation well in this article. It is also why we buy cover.