I saw this rather good post from the folks at Pinnacle Life celebrating 125 years of women's suffrage by highlighting the number of women in senior roles there. That prompted a quick count up - the insurance industry (well, personal risks like life and health) does pretty well for gender balance with several of the leading CEOs being women and many senior executives. CEOs include, Gail Costa at CIGNA, Naomi Ballantyne at Partners Life, Nadine Tereora at Fidelity Life, Susan Basile for BNZ Life, as well as Gillian Vaughan at Pinnacle Life. If you then move to the senior executive level the trend continues. AIA comes to the fore with six of eleven senior leaders being women. At Fidelity and AMP about a third of their execs are women. Bank management teams are more networked but many bank CEOs happen to be women right now.
Thanks for Jon-Paul Hale for bringing this article to our attention. In the UK there is an insurance scam being committed every minute. In 2017 a total of 562,000 insurance frauds were detected by insurers. Of these there were 113,000 fraudulent claims, and 449,000 dishonest insurance applications. The article describes some of the fraudsters claims and the punishments they received. Most of these are general insurance-related.
What's interesting about the article is that, either you can believe that people in the UK are peculiarly dishonest, or that their justice system is completely incapable of detecting when the insurer is having them on, or you begin to get the idea that some people feel that being dishonest with insurers is somehow 'okay', even, a kind of victimless crime. Of course, it has victims. The victims are insurers, and their shareholders - and you may not feel sorry for them - but mainly, they are other policy holders. It is worth noting, while looking at fraud statistics, that there are also case of just honest mistakes: people put the wrong thing down on the form, and insurers decline a claim that should be paid.
Mistakes happen everywhere. But if you read the article, you get a sense of the difference between fraud and mistakes.
You can even google insurance fraud videos. The one below is one of my favourites.
It was great to see more than 500 advisers in our recent roadshow to launch Advicemonster. We know that we are near the beginning of this journey and we have many suggestions for enhancements to the needs analysis and statement of advice documents. Added to that, with more information on the structure of the new regulatory environment and some great feedback from advisers groups we are looking to launch some key enhancements to the service which will be released in October. Then we have some further development decisions to be made. We need your help. To help us decide what features to add after the October update we would be very grateful if you can complete the survey. It can be anonymous (so you can be mean if you want) or you can include your details (so we can talk with you about your cool ideas). So please take a look at the survey
The Australian Taxation Office is allocating resources to investigate whether the tax deductibility of income protection insurance premiums is being claimed appropriately. Click here to read more. Of specific concern is the constant addition of non-income-related benefits (such as death benefits, and lump sums for specific conditions) which should not be tax deductible are growing to the point that they will need to be excluded. At which point companies may be faced with a choice between offering 'pure' income protection policies, with few add-ons, and continuing down the current track. If you like the idea of clients taking advice on each of the main risk protection benefits and constructing a complete plan you may like the idea of 'pure' IP contracts too, it could help remove double-ups and confusion.
Good advice looks easy. Most people want a shortcut. Just tell me which one. Tell me what to do. Make it quick, make it simple. Plus, advice looks kind of unlimited. Most decisions aren’t irreversible – so we assume that we can always change things if they aren’t quite right. The bliss of not knowing.
They don’t know the danger that ignorance brings.
So: people find it hard to pay for advice.
But they do want to have some expensive things. They would like the right to complain and get things fixed when they don’t work. They would like the right to bang the table and say – “But you didn’t tell me that!” if something goes wrong. That costs money, because to make sure advice, which sometimes comes with a recommendation for some action or behaviour to be taken by the client, and also, often, a specific financial product, is complicated. The six-step advice process requires care diligence and skill. Care takes time, so does research, skills are costly to acquire. Governance and quality assurance processes incur expense. Systems to support the whole activity need to be bought and maintained. Taking the time to follow up and coach people on sustaining their commitment to their financial plans is expensive too.
So, people have to pay for advice to get these things. Unless, they think they can get them for free.
Improving conduct regulation is probably vital for maintaining broad confidence in markets, institutions, and processes. Having said that, if you make conduct obligations very broad they will overlap substantially with the provision of financial advice – leaning against the need to pay for advice. Like everything, it’s a balance.
My latest piece on goodreturns (at this link) explores this theme a bit further.
Jenée Tibshraeny has written this article on interest.co.nz after there have been a number of life insurers being sold. Tibshraeny discusses the shift in companies, where these changes leave policyholders and if there are any similarities with the general insurance market. One of the experts she quotes is me, and I am quite happy that the new home for OnePath Life's clients is an excellent insurer, with strong customer focus, but others appear to see more danger. On the other hand, it is true that the life industry consolidation would usually mean less choice - but as CIGNA has no adviser business today, in this case, the value of the acquisition is in what it adds, not the potential for cost savings.
Instagram has over 800 million users and a platform widely used by companies to sponsor posts relating to specific audiences. Recently the FMA was using influencers to push the KiwiSaver health checker, which takes people through three questions 'which takes users through three questions designed to make them consider whether they are saving enough, and have their money in the fund which could bring the best return for their money.'
The specific audience they were trying to reach were 18 - 30 year old females and decided Instagram was the best platform to do that. Click here to read more.
Here is Seth Godin's take on forced rankings, and he's not a fan. But so many humans are, because we so want to be number one, we don't like the idea of 'these are effectively the same - the differences are so small it doesn't make a difference' so we force rankings, in a way which Seth Godin describes brilliantly. Of course, we are familiar with forced rankings in the world of product research. Companies so desperately want to be able to say 'we're number one' that they even sometimes convert our carefully constructed comparisons into a a kind of winners podium: 1st, 2nd, 3rd.
But this isn't how advice works. Because advice is personalised, so is the research.
It's frustrating when you're looking to be crowned 'first' that you might be 'first' in only a set of circumstances, and second in another. For the client, however, even a 'set' of circumstances doesn't matter - only their circumstances matter. Also, they know that 'first' often comes with a cost attached to it, and first at any cost is easy, whereas best value for one individual, isn't. Best value for one individual demands trade-offs and choices that are hard - real-world hard. Winning that argument is a complicated and more interesting competition than the one-dimensional ranking approach.