QPR Database upgrade - V16_4

Changes in V16.4

New Products Rated

New product rated under Mortgage Protection (MP/MPD) - SBS Insurance - Home Loan Repayment effective 1 February 2025

Reviews & Remediations (personal/business):

Trauma - Minor sub-item review for Inflation Adjusted Benefit (personal) and Life Cover Buyback (personal & business)

TPD - Minor sub-item review for Counselling & Support (personal & business)

IP/MP - Sub-item review for Reduction in Wait Period (personal)

Prohibited Incentives - by Simon Papa of Cygnus Law

Simon Papa at Cygnus Law writes about prohibited incentives on the Cygnus Law blog - well worth a read and to follow the website.

Kiwimonster milestone 150 users!

Very quietly our free KiwiSaver comparison tool is being picked up by advisers - after only a few weeks we are at 150 users and rising. If you’re interested to find out more, visit www.kiwimonster.co.nz if you have a quotemonster login, that will work. If you don’t have a quotemonster login, follow the prompt to create one.

How much will you spend in retirement? What do you want to spend?

On Tuesday the Massey Financial Education Centre launched its latest retirement expenditure guidelines. I thoroughly recommend that you have a look. Presented expertly by Associate Professor Claire Matthews, who also heads the school, and Dr Pushpa Wood ONZM, the revised expenditure guidelines offer a solid, real-world, basis for thinking about how much money is required in retirement. Jane Wrightson, Retirement Commissioner, added context to the presenting team by refreshing us all on where we are at with New Zealand superannuation policy. Nick Hakes, Chief Executive Officer of Financial Advice New Zealand and host for the event, was a great advocate for professionalism in financial advice.

In attendance was a small crowd of financial advice, investment, and policy nerds. The group even included two past Ministers of Commerce and Consumer Affairs (Heather Roy, now Independent Chair of Financial Advice New Zealand, and Simon Power, now CEO of Fisher Funds). We met in a pleasant shared office space in downtown Auckland.

Three things really stood out from the presentation:

1.      Associate Professor Matthews highlighting that achieving the lump sum required to move from a ‘no frills’ budget in retirement to a ‘choices’ budget was less than many think, and therefore achievable. This practical optimism is often lost in the overly dramatic world of political debate, and is the natural ally of good quality financial planning.
2.      Dr Wood’s caution that you can live on New Zealand Superannuation provided that: you own a home, you have no debt, and you’re happy with a simple life that includes almost no travel. Pushpa then added very supportive comments about the value of professionalism, boosting her host’s mission.
3.      Jane Wrightson warned us against tinkering needlessly with New Zealand superannuation and encouraged our participation in the upcoming review of retirement income policies.

Pulling it all together, it felt like these are the lessons:

1.      To boost quality of life in retirement we need comprehensive and lasting cross-party efforts to make housing more available and more affordable.

2.      In the absence of good policy individuals can do much to steer their financial affairs better and advice helps a lot. It’s a big problem, but not insurmountable for the careful and well-advised.

3.      The Massey Fin Ed Centre academics offer consistently practical and useful contributions that help guide financial advisers and their customers towards saving for a comfortable retirement.

A reminder: Kiwimonster is live – the new, free KiwiSaver comparison tool built specifically for financial advisers. Check it out at www.kiwimonster.co.nz

Research deep dive session - Thursday 24 January at 11am

This session is not for everyone! We have our research team live most months. In this session we cover: FAQs, legacy product research, rural IP rating, and roadmap. It is usually a very small group, so if you have any other questions you want to ask the research team, this is a great opportunity. If you would like to join us, please drop us a line to kim.oliver@qpresearch.co.nz

How health innovations have increased life expectancy - and could continue to do so

I am a big fan of health innovations. I owe my life, and the lives of my wife and three children, to excellent modern health care systems. I am going to link to an excellent post about new treatments that are emerging at the end of this piece. This is a good news post to focus on what is going well, and some optimism for improvements.

Before I do that, I want to highlight some of the innovations of the last 100 years that have had the most dramatic effect on life expectancy. The early part of the 20th century - from 1900 to roughly the end of the second world war, saw a series of catastrophes. The first world war, the Spanish ‘flu pandemic, the depression, the Holodomor, and then the second world war, including The Holocaust. Life expectancy took a beating - google charts of life expectancy for Western Europe - you will see the dips especially in France. In some places you see long periods where there is an absence of data, which perhaps tells an even more horrific story. But over the last 100 years there have been some incredible innovations which has enabled a dramatic improvement in the life expectancy across developed nations - and substantial improvements in virtually all nations, some developing nations, and even in many that remain desperately poor.

Historical Context: Top Interventions of the Last 100 Years

Sanitation and Clean Water (Early to Mid-20th Century) - Municipal water treatment and widespread adoption of sanitation systems dramatically reduced deaths from waterborne illnesses like cholera and typhoid.

Antibiotics and Infection Control (1940s onward) - The discovery of penicillin and subsequent antibiotics revolutionized the treatment of bacterial infections, which were major causes of mortality in the early 20th century. Advances in surgical antisepsis and sterile techniques further reduced infection-related deaths.

Vaccines (20th Century onwards ) - Immunization programs virtually eradicated diseases like smallpox and drastically reduced others, including polio, measles, and tetanus. Widespread childhood vaccination campaigns have saved millions of lives, particularly in developing nations. It is a shame that vaccination rates in this country have been falling for some time – bringing a resurgence in diseases such as whooping cough.

Improvements in Cardiovascular Health (Mid-20th Century onwards) -Advances in understanding heart disease and hypertension led to effective treatments, such as statins, beta-blockers, and minimally invasive surgeries like angioplasty. Lifestyle interventions and public health campaigns reduced smoking, significantly decreasing cardiovascular deaths. If only we could push on and work on our obesity epidemic, we could continue to make rapid progress in this area. Some of the new weight loss medicines (see below) offer some help in the battle of the bulge – which has a huge effect on cardiovascular health, and cancer rates.

Cancer Screening and Treatment (Late 20th Century onward)
The development of chemotherapy, radiation, and surgical techniques, combined with early detection through screening, significantly improved cancer survival rates. Now we have a whole new suite of cancer medicines which look set to dramatically improve survival rates once again. But more on those later.

Advances in Maternal and Neonatal Care (20th century)
The introduction of prenatal care, safe delivery practices, and neonatal medicine has dramatically improved survival rates for mothers and infants, contributing to longer average lifespans globally. A nod should be given to safety improvements in care of children here too, which has helped not only in the first year of life, but also in the first five years.

It is hard to say exactly how much – as combinations of factors (positive and negative) have created the great outcomes we have today. In aggregate, the shift has been incredible - expectations for life expectancy at birth in the UK were about 48 for males and about 52 for females in 1900. Today they are about 82 years, about a 78% improvement. In New Zealand, the shift has been similar. I haven’t event talked about quality of life yet. Estimates vary, but the big ones have been estimated, in the UK, to have had the following contribution ranges in impact (estimates are as a percentage of the total gain in mortality).

·       Sanitation and Hygiene: 20–25%

·       Cardiovascular Disease Treatments: 15–20%

·       Antibiotics: 10–15%

·       Vaccination Programs: 10–12%

·       Maternal and Neonatal Care: 8–10%

Can the rate of gains continue?

Absolutely, yes. We did a piece of work in 2023 estimating how many deaths, annually, could be saved by bringing our health system performance up to either a) the OECD average or b) the OECD leader. The gains are substantial, and are not just about later life treatments – but saving hundreds of deaths, for example, of women in their 30s, 40s, and 50s, from breast cancer.

Plus, there are so many great new innovations. For that, I want to link to this external article, which details some incredible new discoveries, which are worth reading about:

(1) Five medical breakthroughs in 2024 - by Saloni Dattani

If you would like to read the biography for Saloni Dattani, you can find a brief one here: Saloni Dattani - Our World in Data

Overall, for most people, life has become longer, better, and wealthier. At the same time, it remains true that there is much more to be done. Even just improving access

Updated Health / Medical insurance price comparison database

We have created an updated Medical Comparison database V114. Institutional subscribers have copies in their shared folders / FTP sites. Advisers quoting on Quotemonster already have the new rates showing in their quotes.  Changes are detailed below.

Changes in V114:

Updated nib rates effective 1/1/25

Updated AIA Policy Fee ($7.80) effective 1/1/25

Product comparison database upgrade

The research team worked tirelessly through the holidays—there is always more research work to do. Some highlights from their busy summer, while you were on break, include:

• Library Expansion:
  We now have over 4,000 policy documents in our library. We are confident that no one else has such a comprehensive collection. In addition, we have identified more than 300 old in-force policy types that are no longer sold, which we plan to incorporate into the library.

• Legacy Contracts:
  Before Christmas, we had rated 202 legacy contracts. While that might seem modest compared to the more than 4,000 documents in the library, let us explain: we prioritize legacy contracts with the largest number of existing members. For instance, a 50-year-old Temperance and General Mutual Assurance Society whole-of-life policy might have a few dozen current members, whereas older plans from major insurers such as BNZ Life or Westpac often have tens of thousands—sometimes over 100,000—members. Our carefully curated library now supports about 95% of the existing business research inquiries we receive. Additionally, over the last three weeks, we’ve added two dozen new legacy research evaluations.

• Dynamic Updates:
  A key advantage of our approach to legacy research is that we update ratings whenever there is a weighting change or product upgrade. Some services only provide the rating applicable when the product was last actively researched while on sale. This can lead to outdated insights, especially given the recent trend of blanket upgrades in existing business—particularly by medical insurers and specialist bancassurers acquired by mainstream life insurers.

• On-Sale Research Updates: version 16.3 now live
  We have upgraded our on-sale research database to version 16_3, which includes the following enhancements:

  • Trauma: Minor sub-item reviews for Major Organ Transplant, Early Onset Osteoporosis, Stroke, Coma, Aplastic Anaemia, Trauma Buyback, and Permanent Loss of Hearing.

  • Mortgage: Minor sub-item review for Offsets.

  • Life: Minor sub-item review for Inflation Adjustment.

  • Specific Injury: Minor sub-item review for Loss of Hearing.

  • Medical: Minor amount score review for GP Minor Surgery and Pregnancy.

If you’d like to learn more about the recent changes to our research ratings, please join us at our forthcoming research deep dive meeting. Details will be posted here on the blog as well as via a pop-up on the site.

Industry infrastructure and the value of good government

There is a necessary tension between an industry and government. Too close and there is a risk of coddling, capture, and even worse. Too distant and producers and consumers suffer from the neglect of industry infrastructure.

What do we mean by ‘industry infrastructure?’

These are the systems, practices, laws, and regulations that collectively set up ‘how we do things in this industry.’ In some cases, they are legal and regulatory frameworks - such as licensing of insurers by The Reserve Bank of New Zealand, and regulation of financial markets by the Financial Markets Authority. Sometimes they are literal services - for example, collection of contributions to KiwiSaver by Inland Revenue.

Establishing these and getting them right-sized is difficult. For all our gripes about new regulation, most New Zealand insurers and financial advisers that look at the Australian approach feel our regime is far better. KiwiSaver managers have identified that there is a missing piece of industry infrastructure in their world: a common standardised method for establishing whether a hardship withdrawal should be permitted. I think it is an excellent example of where government can help a sector, which means customers first and foremost but also includes product providers and advisers. Read this article to find out more: “Heartbreaking” hardship applications a challenge for KiwiSaver providers - Good Returns

Reinsurer: post-Covid excess mortality could last a decade

Swiss Re is one of the reinsurers that has analysed mortality trends and identified that post-COVID excess mortality could persist in some places for more than a decade: Post-COVID 19 'excess mortality' rates could remain high for another decade - Insurance News | InsuranceNewsNet

Hat tip to Tony Vidler for highlighting this article.