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Changing the Guard

Have a read of Phil's article about the changing of the guard. Now let's extend his thesis about lots of people changing firms over the next few years - with a bias towards more people being members of groups or corporate outfits.

As regulatory pressures extend across different gorups of salespeople in more or less the same way - that is many of the same rules will apply to mortgage brokers, insurance people, and investment advisers - then the cost pressures are the same.

That's why its interesting to see Phil write about PIS - a large gorup that deals with investment and insurance advisers. PIS has also been linked to the possible acquisition of a high profile life insurance distribution group.

So we have a double changing of the guard. The same forces driving consolidation and change in investments are doing so in insurance - and mortgages. I bet we can expect to see more horizontal integration too, as a result.

Segmented Inflation Rates

We're used to thinking about higher inflation categories in the insurance industry. The term 'medical inflation' as a catch all that explains why medical insurance premium rates need to rise faster than inflation overall goes almost unquestioned - perhaps dangerously so.

But what about the different inflation rates suffered by different people? One group I am certain has suffered much higher inflation than the average would be the younger family with children at home, that also have a large mortgage. Their expenses being skewed towards interest, food, and petrol, I am willing to bet they have experienced effective rates of inflation in the double digits.

Another group whose inflation rate I would like to know more about is retired people. Although they've probably escaped the effect of fast rising interest rates (because the majority own their homes outright - or have other residential arrangements) they will have suffered more from local authority rates increase, food cost increases, and energy cost increases. If anyone is aware of any good data in these areas I would be fascinated to review it.

Medical Tourism and Insurers

It is time for parochial medical insurers to get over themselves and start looking at medical tourism seriously. This is the message from the global economy. It's also informed by family experience. American insurers exasperated by rapidly rising costs, some indifferent performances, and a litigious environment, have been looking overseas.

According to a recent article in the Economist 33,000 American's used one Thai hospital alone. I was sceptical about this trend as well - and I could have been guilty of the casual prejudice of one person who looked at the trend for a big US-based insurer.

He imagined village huts and rusty scalpels. What he found was a state of the art hospital exposed to the demands of the market performing at the highest standards in the world. The best such international facilities easily outperform 'average' American hospitals at a significant discount to the price. Because of their IT systems they can prove it too.

The reason I waas saved from such prejudice is that my father recently went to Hungary to have a lot of dental work done. He is not the most adventurous person on earth but he was reassured by some background reading he did, and the fact that he employed a chemical scientist in his company that was from Hungary. The price was tempting. In the end he got excellent care, at a fraction of the price he would have paid in the UK, and a good holiday into the bargain - although he was mainly restricted to soup, sightseeing and a passion for languages made up for indulgence in food.

Dalziel Speeches

Another recent speech by Lianne Dalziel posted to the Beehive website provides some additional information on the legislative proposals, available at: http://www.beehive.govt.nz/speech/4th+annual+securities+law+update


Also a good generic speech from her on privacy issues as well, available at http://www.beehive.govt.nz/speech/privacy+issues+forum


The Minister must have had a busy day, not even being able to use the same speech twice. hat tip: Rob Dowler.

A Minister With Passion...

It is a coup for Philip Macalister to have Lianne Dalziel posting on his blog. Her comment, moreover, was a well balanced advance on earlier comments on the consultation process. While she may not have made a concrete answer to the question "why the rush?" perhaps  the answer "why the delay?" is adequate as far as the minister is concerned when she is confident of National support. To put more plainly the message of my whimsical earlier post, it's going to be hard for the industry to find friends to justify delay. 'The industry' has nearly zero political capital right now - because of the state of financial markets.