FSC Life and Health Insurance Special Interest Group Networking Event and launch of Money and You research

The Financial Services Council (FSC) will be exploring trends and insights from their latest Money and You research report ‘'Protecting Possessions, Not People' at the upcoming Life and Health Insurance Special Interest Group Networking Event in July. The event is open to FSC members in the Life and Health insurance community and will feature:

• The value of Fringe Benefit Tax exemptions for health insurers with insights from the NZIER investigation, presented by Tony Reid from Southern Cross.

• Genetic testing - examples of the impacts of banning the use of genetic testing in underwriting, presented by Stephen Potter from AIA New Zealand.

• Outlining good practice for informing future MBIE consultations with Kirk Hope, CEO of the Financial Services Council.

• Money and You: Protecting Possessions, Not People Research Launch - a taster of the FSC’s newest research with FSC Research Committee Chair, Mark Banicevich and a small panel discussion on the attitudes of New Zealanders and insurance.

The event will run from 10:30am – 12:30pm on 15 July at Russell McVeagh, Level 30, Vero Centre, 48 Shortland Street, Auckland Central, or people can join online, you can register here.

Asteron Life announce enhancements across Personal and Business Insurance

Asteron Life has announced a suite of enhancements across their Personal and Business Insurance products. All enhancements apply to in-force policies issued after August 2004 and will apply to claimable events from 5 June 2025.

Some of the key enhancements include:

• New support benefits. An example is the new Family Member Accommodation & Transport Benefit which offers up to $300/day for accommodation and $2,500 in travel expenses reimbursed to support a family member during treatment.

• Life Cover with accelerated Trauma Recovery Cover conversion benefit

• Updated definition for major organ transplant, including widening the scope of eligible procedures.

• Updated definition for diabetes, including reducing the threshold for claims from two complications to one.

• New Rehabilitation and retraining Benefit for Business Insurance customers - increased support of return-to-work efforts by reimbursing rehabilitation and retraining costs.

• Increased flexibility to increase cover in line with life or business changes that happen to customers.

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Legal and regulatory update for the life and health insurance sector

29 May 2025 - APRA has released its suite of quarterly industry aggregate insurance statistical publications for the March 2025 quarter. https://www.apra.gov.au/news-and-publications/apra-releases-quarterly-insurance-statistics-for-march-2025

30 May 2025 - The FMA has released AML/CFT guidance for Financial Institutions on risk ratings for new customers. https://www.fma.govt.nz/library/guidance-library/aml-cft-guidance-for-financial-institutions/

30 May 2025 - ACC Minister Scott Simpson has accepted the resignation of ACC Board Chair Dr Tracey Batten. https://www.beehive.govt.nz/release/acc-minister-accepts-board-chair%E2%80%99s-resignation

5 Jun 2025 - APRA and ASIC have released an update on the progress life companies (life insurers and friendly societies) have made in addressing issues related to premium increases, product design, and disclosure and marketing materials.   https://www.apra.gov.au/news-and-publications/asic-and-apra-provide-update-on-review-of-life-insurance-premium-practices

5 Jun 2025 - Kate Le Quesne has been appointed to the new role of Assistant Governor Enterprise Services at RBNZ. https://www.rbnz.govt.nz/hub/news/2025/06/new-appointment-to-the-rbnz-executive-leadership-team

Munich Re look at how insurers can develop prevention strategies

Munich Re’s Life Science Report 2025 has insights on global trends and risks that will shape the insurance industry over the next decade. We’ve written about their in-depth looks at AI in Healthcare and Improving Cancer Outcomes sections, and now we’re looking at their Prevention chapter. 

Prevention is all about intervening before a disease or condition occurs – trying to extend the health span of peoples’ lives and prevent claims from arising in the first place. 

In order to develop effective preventative strategies, insurers need a deep understanding of each of their clients’ unique characteristics, risk factors and health trends. Insurers should focus on areas where they’ll get the most bang for their buck, addressing lifestyle factors that contribute to the most significant preventable health risks and claims drivers – namely cardiovascular disease, cancer and mental health conditions. The key preventable causes for these are obesity, unhealthy diet, physical inactivity, smoking, excessive drinking and poor sleep patterns. Munich Re have a range of tables showing the impact of preventive measures on mortality, disability, critical illness and health care costs.

Munich Re categorise preventative health measures based on the stages of disease they are intended to prevent:

• Primordial prevention - preventing development of risk factors for the entire population

• Primary prevention - prevent onset of disease e.g. through lifestyle adjustments and medications

• Secondary prevention - early diagnosis (e.g. through screening programmes) and prompt treatment

• Tertiary prevention - manage existing disease to minimise complications and improve outcomes to prevent further morbidity and mortality

• Quaternary prevention - protect from medical interventions that are likely to cause more harm than good.

To be effective, targeted interventions need to address an individual’s unique needs. By using personalised risk profiling, digital risk scores and advanced analytics, insurers can tailor interventions to maximise impact. To be efficient, insurers need to be able to amplify their prevention efforts to reach a wide audience and use digital systems to automate processes and incorporate real-time feedback. One of the most effective means of prevention is improving health literacy, the ability to navigate health information and make informed decisions. Munich Re suggest that informing policyholders about prevention benefits, enhancing health literacy, making things easy and incentivising members will all help drive positive health outcomes.

As we’ve already seen starting to occur here in NZ, insurers are positioning themselves as active participants in the well-being of their policyholders (with AIA’s Vitality programme perhaps the most notable example of this). We’d love to hear from you instances where your clients health insurance has led to them taking proactive steps to improve their health.

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AIA announce four new national sales manager appointments

AIA has made four new appointments within their Distribution team.

Aaron Gilmore has been appointed National Sales Manager, Retail. Gilmore has been with AIA since 2023 and has been an AIA Vitality Coach and Northern Region Manger, Business Development.

Carley Ellis has been appointed National Sales Manager, Aligned Advice. Ellis has 20 years of experience in New Zealand’s financial services industry and has a proven track record in business development, financial advice, and leadership.

Sarah Hepper has been appointed National Sales Manager, Corporate Solutions. Hepper has over 25 years of experience in the insurance industry, and has spent the past 15 years contributing to the growth of Corporate Solutions at AIA NZ

Nick Russell has been appointed as National Sales Manager, Home Loans. Russell has extensive experience working alongside home loan advisers.

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Medical premiums keep on rising – Jon-Paul Hale takes a look at why

Jon-Paul Hale has taken a look at the pressures that have resulted in sharp increases in medical premiums this year. From more claims leading to additional people and resources needing to be hired by insurance companies to the flight of clinicians overseas and training on new technologies and tools, there seems to be a perfect storm leading to the hikes. Hale compares premiums in NZ to those in Australia, and despite the recent increases, we’re still looking affordable in comparison. Hale also ponders what would help stabilise premiums, giving a few examples. It mostly comes down to spreading the cost across a wider pool of people. A good article, one we’d recommend you check out.

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Best product, no. Best solution, yes!

We are in enthusiastic agreement with Steve Wright’s recent article, in which he questions what makes the best product in his latest article on Good Returns. Steve advocates that the FMA and Disputes Resolution Service need to debunk the view of advisers that they sell only the ‘best’ product as rated by independent services.

As a research business, we are happy to debunk the notion that we tell people what to sell, or ‘rank’ products. We go to great pains to point out that this is not our job, we understand that our role is to provide useful information about the meaningful differences between products to enable advisers to have better conversations about suitability. We will never tell you what product to recommend because only financial advisers can give financial advice. To quote directly from a slide from our recent roadshow:

We also highlighted the importance of recognising the financial adviser’s unique role in the process of reconciling objectives with options and choices and limitations to arrive at a good solution, which is nearly always a compromise, unique to the client. That’s the essence of suitability assessment, entirely within the financial adviser’s legally defined role. If you haven’t heard us talk through the leading car purchase example, join us at a training session coming soon!

Like Steve, we believe that the best product is the one that suits the specific clients’ needs – even if it’s not the most generous, or the highest rated. He stresses that advisers must thoroughly understand a client’s individual circumstances, risks, and goals to come up with the most suitable product, then give enough detail that the clients can understand the advice and the products recommended.

What are some examples you’ve come across of products that at first look may not be the ‘best’, but actually have been the best fit for your clients?

If you have missed some of the comments on Steve’s article, we particularly like these:

“Advisers must give financial advice that I'd suitable… suitability has a lot more to do with the client circumstances than stars”

“In short, I don’t believe that we should be looking for who’s the “best.” I believe we should be looking for the “best fit.” And that’s a very different thing!”

“It's a good discussion point, but if you want a more realistic glimpse of what is likely to happen here in the future, speak to those involved in the Australian market about the removal of the 'safe harbour' provision in their financial advice regulation. Not only is it likely that product research into features and benefits likely to become more necessary, not less, but it also seems more and more likely that the actual underwriting terms offered across the entire market will need to be considered.”

More news:

Financial Advice NZ upcoming webinars and workshops - Data Informed Decisions & Demonstrating Suitability of Advice for Private Health Insurance 28 May, Navigating the Complexities of a Blended Family 11 June, Ethics Workshop 12 June, Understanding Portfolio Investment Entities (PIE’s) 25 June, Tackling the Tough Questions 25 June

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Munich Re look at improving Cancer outcomes

As part of Munich Re’s Life Science Report 2025, they have investigated the projected impact of advances in cancer treatment and research. These advances will change how cancers are defined, prevented, diagnosed and treated and are expected to significantly improve cancer mortality.

Cancer is the leading cause of death among policyholders for most insurers worldwide, as such it demands investigation. Much progress has been made in the past couple of decades to improve cancer mortality, through both reducing cancer risk factors (such as the dramatic downturn in tobacco use) and better diagnosis and treatment. Mortality improvement trends are expected to accelerate as our understanding of cancer genetics are combined with artificial intelligence (AI).

AI will be used to both improve cancer risk prevention and diagnostics. AI analysis of an individual’s personal information such as health data, family history, genetic and epigenetic profiles, microbiome, living environment and exposure history, sometimes called a statistical biopsy, will give a better understanding of risk for a wide range of cancers. This could potentially allow for a personalised approach to risks, behaviours, and identification of which strategies may be most effective in addressing these factors.

Being able to diagnose cancer more accurately, and at earlier stages, should improve cancer mortality. AI has already led to refinements in imaging studies, and in blood, urine and tissue samples. AI can also be used to analyse the tumour’s genetic pattern, other associated biomarkers and an individual’s risk profile to allow for better prognosis and management approach. AI’s ability to recognise patters not apparent to humans will help with diagnostic tools such as imaging studies, pathologic specimen interpretation and photograph analysis.

More effective screening approaches will lead to earlier cancer diagnosis and improved cancer mortality. An important technology, ‘liquid biopsy’, is currently used to analyse fluids to look for markers indicating the presence of a cancer, typically used to detect residual cancer after treatment or recurrence. If a liquid biopsy test that can screen for multiple cancers in asymptomatic individuals could be brought to market at a price point where it is accessible to the masses, it would be a game changer. Though it would also raise concerns about over-diagnosis and surveillance bias, as some identified cancers may never post a significant mortality risk.

The combination of AI and genomic analysis of tumour cells and immune cells has led to the development of targeted treatments that exploit specific genetic patterns. These treatments are more precise and safer than chemotherapy, with the four key categories of therapies emerging being targeted monoclonal antibodies, immune checkpoint inhibitors, cancer vaccines and adoptive cell immunotherapy.

With potential changes in how cancers are classified, product definitions will need to be modified. Instead of being classified based on their tissue of origin, it’s expected new cancer tests will be able to categorise cancers based on their underlying genetic causes – potentially leading to thousands of cancer subtypes.

Where previously terminal cancers become able to be managed and instead turn into chronic disease, there may be implications for living benefits products. Reduced mortality should be favourable for life insurances businesses, though the costs of more sophisticated, individualised cancer treatments may have a negative cost impact on health insurance businesses. Munich Re predict that advances in diagnosis and changes in diagnostic criteria are going to increase cancer incidence rates in the short term, but may decrease critical illness rates if major advances in cancer prevention are realised.

AI will also have implications for underwriting. AI-based diagnosis is likely to be more accurate and predictive than current methods, with fewer false positive and false negative results, enabling risk to be better assessed. Better monitoring post-cancer treatment will mean recurrence risk can be more accurately assessed too.

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AIA release Claims Compass Report

AIA have released their second Claims Compass Report, covering data for the year ended 31 December 2024. AIA have over 797,000 Kiwi protected and accept 92% of all claims received.

In 2024, AIA paid out $829.6 million in claims, up $95 million on the previous year. Life accounted for 41% of all claims paid ($298.1 million), followed by Health ($167 million), Trauma ($139.5 million), Income Protection ($97.2 million) and Total Permanent Disablement ($23.9 million).

Life claims were up $34.6 million, Health claims were up $23.9 million and Trauma claims were up $22.4 million on the previous year. Increases in claims were put down to the combined impact of insurance levels increasing alongside inflation, more innovative treatment options with higher costs than established treatments, and growing demand for health services due to an aging population and growth in chronic diseases.

AIA NZ Chief Customer Officer, Maddie Sherlock said

“In New Zealand, we have observed increased rates of heart disease, cancer, diabetes, and poor mental health, brought about by worsening lifestyle factors such as diet and lack of exercise. These worsening public health trends lead to a higher demand for health services, which puts upward pressure on private health claims.”  

AIA have shone a spotlight on mental health. In 2024 $25.7 million was paid out towards mental health related claims, and $8.1 million for suicide claims. Mental health claims were highest for men aged 40 and 49 ($6.4 million), followed by men aged 50 – 59 (5.6 million). Sherlock said

“This big jump in claims for this age group reflects their life stage which is likely to be impacted by the weight of increased family, financial and professional responsibility and high demands upon their time.”

“This is the age where your overall health starts to be impacted by your nutrition, sleep and activity levels versus when you were younger. And your risk of lifestyle diseases increases. These changes can of course impact your confidence and overall mental wellbeing.”

The top AIA NZ mental health claims in 2024 were:

1. Depressive disorders 44%

2. Anxiety / panic disorders              14%

3. Post Traumatic Stress Disorder      4%

4. Chronic Fatigue Syndrome           3%

5. Chronic Pain Syndrome                2%

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Proposed changes to Health and Safety Laws

You may have seen the proposed changes to Health and Safety laws, whereby the government wants to reduce compliance costs and provide greater certainty for businesses. Bell Gully have a good summation of the proposed reforms here, but basically the Government is endeavouring to reduce the compliance burden, clarify health and safety duties (including limiting obligations for small, low-risk businesses) and clarify the distinction between governance and operational health and safety responsibilities.

There are many opposing points of view on the changes. Council of Trade Unions president Richard Wagstaff has said

"It's disappointing to see the minister has ignored the widespread consensus on what New Zealand needs to do to improve its poor track record and instead has chosen to carve out small businesses from good health and safety practices.

Exempting small businesses from best practice health and safety makes no sense when we know that small business are riskier and need more support."

Institute of Directors general manager Guy Beatson said

"Clarifying that boards are accountable for risk management and safety culture - not hands-on management - will mean directors can better focus on their core governance role without inadvertently overstepping."

Mike Cosman, chair of the Institute of Safety Management said

"The reforms are focused instead on costs to businesses of prevention and not the much greater costs of harm.

This seems to be looking through the wrong end of the telescope to us because the cost of our poor health and safety record is north of $4.9 billion per year to say nothing of the impact on workers and their families."

Russell Hutchinson has taken a look at the proposed regulations and put in his two cents.

As a country we have a not-terrible, but not-so-good track record on health and safety. One measure is fatal accidents, here I have selected countries we often use in comparisons:

Clearly, we are not as bad as, say, the United States. If we delved into that we would see significant variation on a state-by-state basis – but let’s not worry about that for now. Compared to Australia, for roughly every three people who die in a workplace accident there, four will die here. Not so good. What’s surprising is how well the UK performs – better than France and much of the EU, and better than Japan, places I normally consider to be better organised and more prescriptive in terms of employee protections. Not so! I like it when we find good data which challenges my pre-existing view. It’s a reward for paying attention to the data.

Are the proposed changes to governance liability right or wrong? One argument could be that by reducing liability on directors the workplace will become less safe. Another view is that by ensuring we place responsibility on the people who are closest to the problem we will better target the point at which better decisions can be made. Probably we will not know which until we have seen this operate for some time. Progress always seems to be so slow. Incentives also count – and the role of ACC, which has many benefits to our economy, also has some negative effects, somewhat masking the price signal in this case. I wonder if that will also get talked about.

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