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They have a point: relying on charitable donations and volunteers has its limits

The ambulance service should be properly funded. Link. After an accident in June 2016 which resulted in me getting acquainted with the St John Ambulance service I was astonished to discover the extent to which the service relies on unpaid volunteers. Most of the people I talk with are amazed to discover how this front-line service, that involves a great personal cost (in training, time, and physical and emotional stress) is run on the goodwill of the people involved.

Hayne and the missing bonus payment

AMP have stated in their annual report that the company has made the executive decision to refrain from paying former chief executive Craig Meller and former advice and banking executive Rob Caprioli their unvested incentives, which totals to A$10.8 million ($11.16m). The decision to do so reflects AMP’s initiative to improve upon the issues raised with ASIC during the financial advice hearing with the Royal Commission. When asked about the bonuses of New Zealand executives, an AMP spokesperson stated that they believe the bonus outcomes were reflective of the performance challenges they faced here in New Zealand. AMP have stated that further changes are set to be implemented as the year progresses, while ensuring employees are not unjustly penalized. Click here to read more.

Fidelity Life Business Development Strategy

Fidelity Life has set plans to expand the number of business managers and support staff. They have begun the expansion process by appointing new Business Managers and Business Account Manager. The expansion plan is a follow up of a new sales and support model Fidelity introduced in December last year to ensure advisers achieve better business goals and ensure better customer outcomes. The new model resulted in the development of Business Manager and Business Account Manager roles. The role of business manager has been filled by Jenn Quinn and Fidelity is expected to shortly announce the names of the other Business Manager and the Business Account Manager.


Arohanui Christchurch, kind regards insurance companies

Our sense of unity was solidified after the atrocious Christchurch terror attacks. The Prime Minister, other governing bodies, those with a platform and communities all around the country demonstrated what it means to be a New Zealander. The outpouring of support was not limited to individuals, corporate entities were quick to condemn the shootings. 

Major insurers have pledged to make an exception on the terrorist exclusions in policies at this time to provide cover for those affected by the attacks. Although AIA policies do not include this exclusion, they have set up a dedicated customer support team for clients affected by the shootings. Similarly, Fidelity Life have set up a customer and adviser care team. NIB have expressed their willingness to assist advisers and affected clients during this time by ensuring employees are available to offer all those affected the appropriate support.

Cigna has pledged to honor claims made by customers affected by the attacks, although many of their products “don’t have these exclusions”. Partners Life have taken a similar stance by choosing to refrain from applying the terrorism exclusions to the very few policies that include this exclusion.

AA insurance, State and AMI have all agreed that the terrorist exclusions will not be applicable to those affected. All three insurers will work to ensure clients that were affected experience a seamless claims process. Click here to read more 

United Kingdom: Damages Act discount rate review begins

In the UK, where private insurers must meet most claims for accidents, the discount rate applied to settlements for lifetime loss of income has been a major problem for the last couple of years. The formula for the discount rate never envisaged the market conditions that followed the global financial crisis of 2008. The consequence of that was a negative discount rate: -0.75% applying to future income losses. This saw the capital cost for settlements balloon. So British Insurers are cheered by the review of the discount rate currently underway.

"We welcome today’s announcement. Insurers remain committed to paying 100% compensation and want to see a process for setting the Discount Rate that delivers a fair outcome for claimants, motorists and taxpayers. The outcome of the review must deliver this, and we will continue to play our part to ensure that it does." says James Dalton, Director, General Insurance Policy, Association of British Insurers of a recent announcement made to the London Stock Exchange. Click here to read more. 

Adviser Businesses: Opportunity is Among the Uncertainty and Change

Changing requirements for adviser businesses put pressure on everyone, but these changes could create winners and losers in the advice world in particular, as well as the wider insurance sector in general. Some advisers will identify opportunities while others will find the pressure overwhelms them – and so they will make a decision to leave.

I am concerned that rushed change, often poorly designed, could damage the market. That worry applies not just to legal and regulatory change – such as a Supplementary Order Paper running to well over 100 pages – but also to industry reaction to the new law. I am particularly worried about reducing the supply of advice to clients and pushing some out of the advice sector.

But you may also find great opportunity in change. Could that be you?

The advice business that is more likely to succeed will have one or more of the following characteristics:
• A strongly defined advice service with clear value to the customer
• Strength (or scale) in a particular territory
• Well-organised marketing processes, and some experience of marketing automation
• Compliance assurance processes that provide evidence to managers of good adherence to advice standards
• Good governance processes, with effective oversight of how advice is given, how insurance providers are selected, and how clients are served
• Access to capital
• Most of all: an optimistic frame of mind about the opportunities that may emerge
Of course, even the best advice businesses usually need to work on one or more of these, and most need to do some work in each area.

Transplanting investment-focused advice processes to an insurance or mortgage advice business can fail – because the importance of the emotional connection to the client, their need for cover, and knowledge of insurance products is lacking.

Forcing your advice into a process designed by a technology provider can fail too – because systems design isn’t the same as service design. The problems of failing to focus on the customer and their journey through the process of purchasing advice is often lacking.

Taking time to work on these areas of your business is vital, however, because:
• If you know you have strong advice processes, a good compliance assurance plan, and good governance, you will have nothing to fear from the new compliance regime
• If you have good systems, scale, and operational efficiency then you can cope better with any changes, and also look for growth opportunities
…and there will be opportunities to grow – if you understand your balance sheet and have access to capital, you may be surprised at the opportunities available over the coming years.