I've just finished reading "The healthy country? A history of life and death in New Zealand" by Alistair Woodward. I found it well worth the read. The issues of health and death are central to the role of insurers of people. This book is a treasure trove of information about the history of those things, and also provides some interesting ways of looking at the future of them too. There are reminders of the kinds of things that you realise are obvious after you read them, but which one obviously was not continually conscious of. For example, for a public policy to affect mortality much, its effects must be widespread. Another example, that causes of death at the individual level are not the same as the causes of incidence at the population level. Another: that mortality changes can be large - witness the massive reduction in heart disease-related deaths, and the reduction in lung cancer deaths currently being experienced. It also make awkward reading when faced with evidence of the impact of European colonisation on Maori. Thanks to Jeremy Bernstein for the recommendation. As a consequence of reading this one of my New Years' resolutions is to revise my stats knowledge. Link to Amazon page, summary, and reviews.
Hans Rosling liked to ask audiences to estimate the answers to questions. He would ask people to estimate what proportion of the global population is poor, and whether that proportion has been getting better or worse. He would ask audiences to estimate the participation rates of poor children in schools, and whether that was getting better or worse. You can probably guess - most audiences tended to have a very pessimistic view of what has been going on, when in fact many things are getting a lot better. He acknowledged only one area that, at a macro level was worse: the environment. But to stay on target, issues like child mortality, have got a lot better over time. More at this link. The book, Factfulness, was one I read during the year - and is well worth a look. I have an emerging view that the insurance sector needs to rediscover its cause-related alignment of years past. Helping people live longer, healthier, and more productive lives is the place where insurers' and consumers' goals are closely aligned. We should put more focus there.
Although the obvious predictions for 2019 include continuations of the legal and regulatory trends that have been running for the last couple of years, of course, it is important not to narrow down focus to those things alone.
Digital strategy is important to align our businesses with the main ways our customers want to engage.
Advice strategy is vital to align our product offerings with the main needs of our customers. I thought about calling this one 'marketing strategy' - but I wanted to underline that this point is about what we think is right, in terms of advice, for the customer. That this is a customer focused point, but not customer led.
These two show that there are some dangerous mis-alignments in our sector and they are connected. Life insurance takes 55% of the premium in the sector (excluding health insurance). Yet it is our least engaging product, and less useful or important than income protection (in aggregate, rather than in one individual circumstance).
Consumers aren’t much interested in what we do mainly because we aren’t talking about what’s important.
The NZ Herald's take on the FMA's survey of consumer trust in their financial services providers can be found at this link. Although KiwiSaver comes out bottom of the list - which must be some sort of a critique of this expensive government policy, and its regulatory minders - life insurance only just squeaks ahead of it, leaving us no room for self congratulations.
The FMA has this media release explaining the link, identified from their recent customer survey, between trust and how well fees are understood. The short version is that consumers trust you more if they feel the products are suitable and can understand what they are paying. This makes me laugh. As I am in the midst of the holiday season surrounded by people who are not in the financial services industry I don't have far to go to get a reality check. With most services, consumers don't even suspect that it should be hard to understand what they are paying...
Chatswood closed at lunchtime on the 21st and re-opens on the 7th of January. Kelly will be available to help you, but Fran and Russell will be off from the 19th of December to the 15th of January. Although if you have an urgent question pop it through by email and I should be able to get back to you within 24 hours.
All the best for the holidays, whether it is Christmas for you, or just a great break, we do hope you enjoy it. We wish you a prosperous 2019.
As you are heading into the Christmas week, it is worth remembering that one of the best preparations you can make for 2019, is to take a decent chunk of time off to re-charge. My best work oftens comes after letting all the usual tasks drop, spending time with different people, writing random stuff in my journal, watching a stack of movies (I got seven in on my recent plane trips), reading and drawing. Whatever helps you switch off, I hope you have plenty of time for it over the next couple of weeks.
The details of nib's quarterly premium review include the proposed increases for January to March 2019. Find out more at this link.
Slow change can be a great ally. Take any large project, break it down into many small steps, and you can win by gradually tackling each one over time. Whatever your 'elephant' sized business problem is - digitising old records, preparing for the new compliance regime, or establishing content creation skills within your business - slowly but surely, 'eating the elephant' can be made possible.
Slow change can also be a great enemy. The classic personal example is how weight tends to creep up slowly over time. The classic business example is failing to keep your skills up to date. Underinvestment in personal skills does not show up straight away - in fact it looks like a gain: you can spend that time on something else, maybe something with a short-term payoff, while the cost savings fall to the bottom line. But it is really a question of making a withdrawal from the long-term value of the business.
Sooner or later a reckoning comes - and then perhaps the bill falls due all at once: income falls, or you have to make a large investment of time and money to catch up.
Congratulations to Stephen - Here is a recent press release from AIA/Sovereign:
Stephen Potter to join AIA/Sovereign as Chief Underwriter
Auckland: 19 December 2018
A well-known underwriter with a long history in the personal insurance industry will be leading AIA/Sovereign’s Underwriting team from the New Year.
Stephen Potter will start as Chief Underwriter to both AIA and Sovereign on January 15.
Sharron-Moana Botica, Chief Customer Officer at AIA and Sovereign, says Potter comes with a wealth of experience.
“Stephen first joined Sovereign back in 1989, and as such was one of the ‘originals’ at the company,” she says.
“Five years ago he left to work for AMP, before heading over to Fidelity Life.
“Stephen’s expertise, earned over nearly three decades, mean the AIA/Sovereign Underwriting team will be well-placed to help make New Zealand one of the healthiest and most protected countries in the world,” she says.
“He’s told me that he’s incredibly excited about the opportunity, given the innovation and strategic focus that we are applying to Underwriting, as we develop AIA/Sovereign’s market leadership in this area,” Sharron-Moana Botica says.