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Got your phone insured? ...well that's alright then!

According to UK Insurers Bright Grey, more people have mobile phone insurance than have critical illness cover. What this says about us is not very reassuring.

As I pointed out in my recent Asset article, most people don't want to hear about the risks that life brings - they just want to get on with leading lives of unrelenting consumerism, of which the mobile phone is perhaps their most closely held talisman.

This from Nicola York of UK Money Marketing:

Bright Grey's survey of 2,000 people found 15 per cent of the UK population insure their white goods and mobile phone compared with 14 per cent who have critical illness cover.

Life insurance was third on the list with more people insuring home contents and travel abroad than their life.

When asked what the most important thing to insure was, only 11 per cent said mortgage payments while a mere 2 per cent said critical illness cover.

Pet insurance followed hot on the heels of CI cover at 1.5 per cent.

As Bright Grey product director Roger Edwards says:
"Surely running the risk of losing your home is a bigger concern than losing your TV and DVD? But many people seem to have lost sight of their real priorities. Their financial savvy seems to have gone out the window when deciding what insurance to buy."

We live in shallow and changeable times. As Seven Investment Management director Justin Urquhart Stuart often remarks: "What is this year's fashion fad will be next year's tank top."

Insurance distribution seems yet to be able to ride this trend. Yet it is possible. If fuddy duddy old Motorola can deliver the goods with RAZR then we certainly have an opportunity. But it won't be through imitation, it will likely be through identification with our market.

Mobile Phones and Money

Usually mobile phones are more effective at relieving one of money. ASB's new system Pago looks like they could at least allow someone to send you some as well.

The system looks designed to be complementary to EFTPOS and appears to steer clear of the merchant space. It's more targetted at person to person transfers of sums under $200, and kicking off in conjunction with the online market Trademe. The limit, they say, is because of security reasons. Authentication and  repudiation on the one hand and cost effectiveness on the other create difficult competing forces in the electronic payments space. This has left the field open for often clumsy and inefficient credit cards online which are hard for mini-merchants such as occasional trademe users to plug into.


12 Days of Christmas Cost $18,348.87

Its true, someone has calculated the cost of the 12 days of Christmas, and its $18,348.87 (USD) and is 6.1% higher than it was last year. Go look at the link. There are a series of comments about the methodolgy and comparisons in pricing - sadly human nature means these tend to focus on the price of the Ladies dancing and Lords a leaping etc... many such comments are, it would appear, coming from people used to haggling over hourly rates with ladies of negotiable virtue.

Coltman on Networks

This article has Jamie Coltman identifying some advisers as jumping into networks. It is worthwhile sounding a note of caution. The elements of panic he refers to are absolutely true. Lots of advisers are scared - or are being scared - by coming regulation. This is convincing a few to jump into networks, sell their business, or become tied in some way.

That may be a great response, but the driver will need to be bigger than just fear. Canny advisers will wait untill well into next year, and maybe into the year following to assess their options. Having said that - for many their options will be exactly as described: sell, tie, or align in some way.

This is a good quote:

"Next, advisers should take a closer look at the PE ratios for some of the bigger publicly listed companies within their industry and compare them to what they could sell their businesses for. They then need to ask why there is such a big gap and how to narrow it."

Unfortunately, the biggest reason why they are valued so differently is scale, followed closely by management, two issues that cannot really be addressed staying outside of aggregators, networks, etc. But, critically, these are also issues that are not addressed by all networks either - so you should use them as alignment criteria.

Actuaries Under Attack

Was it mere coincidence, or deliberate decision that saw the of Gareth Morgan's piece attacking the actuarial profession in New Zealand released at the start of their national conference in Queenstown? He describes the profession as a "snakepit" which he had "uncovered"

Since funding scandals are the stuff of political debate at present, it seems only fair to point out that the actuaries raised funds for their convention from sponsorship - and Chatswood is also a minor sponsor of this event.

Auckland Motorways

This site was publicised in the North Shore Times. Although my mate Matt thinks an interest in motorway intersections possibly reveals a chemical imbalance in my brain which may be treatable with appropriate medication, I actually think that lots of people spend time in traffic and occasionally pause to wonder what all the digging is meant to accomplish. Here at least are some diagrams!

Insurance Bermuda Triangle

This is a great introduction to an article at Money Marketing (UK version - available for registered users, but registration is free).

Income Protection is the Bermuda Triangle of protection.

According to the Swiss Re report 2005, around 92 per cent of advisers say they recommend income protection but when the consumer emerges from the advice process, very few people have actually puchased an IP product.

So IP goes into the advice process but disappears at some point between initial recommendation and point of sale, just like the aeroplanes and boat which are never seen again.

I think we have a lot of the same issues here and this valuable cover is undersold as a result. We think complexity and cost are standing in the way, and a lack of understanding of the right way to package the product. There may be a market niche for a specialist distributor of income insurance. Alternatively, KiwiSaver may present some opportunities for workplace marketing this cover - it is a natural partner to savings.