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Quarterly life and health sector report time

Time to suspend judgement and work on the data this week - a huge effort goes into pulling together all the financial results, legal and regulatory updates, product, price, and commission changes. This time around we have 14 detailed structure charts to share with you on different ways FAPs, ABs, IPs, FAs, and NRs and their companies may stack together. Plus a lot more detail on current FSC statistics and channel shares. But all that means less time to write on the blog. You will have to check out the quarterly review next week. 

New Chief Claims Officer role filled at Partners Life

Congratulations to Tracey Lonergan who has been appointed in the newly created role of Chief Claims Officer at Partners Life. Tracey moves from her role as Head of Claims at AIA, and previously roles with Asteron Life and Sovereign. 

Partners Life announcements states:

Tracey brings exceptionally strong claims expertise, a track record of innovation and excellent leadership skills to the team. Tracey starts with us on 30 September and is a great addition to our senior leadership team. She will be critical to the delivery of our major claims projects and the ongoing leadership of our claims team. We are looking forward to introducing you to Tracey over the coming months.

Southern Cross $10.7m surplus

Media release from Southern Cross:

Southern Cross Health Society posts $10.7m surplus on strong performance

Southern Cross Health Society has today released its annual financial results, posting a surplus of $10.7 million for the year ended 30 June 2019.

New Zealand’s largest health insurer, Southern Cross Health Society paid out $963.7 million in claims, up six per cent on the previous year. At 73 per cent of all private health insurance claims, the business paid out significantly more than its 62 per cent market share.

In the last financial year, the Health Society received $1,080.4 million in premiums. For each of those dollars it returned 89 cents in claims to members. This compares to an average of 67 cents in the dollar among the remaining New Zealand health insurers, with some returning as little as 60 cents in the dollar.

Southern Cross is a not-for-profit Friendly Society which aims to make a modest annual surplus to deliver maximum value for its members.

Southern Cross Health Society Chairman Greg Gent says the surplus is the result of carefully balancing income from premiums with outgoing claims.

“The Society continues to deliver excellent value for members with an outstanding claims ratio compared with other health insurers. We’re always conscious of the fine balance between offering maximum value for money to our members and ensuring the affordability of premiums.”

Chief Executive Nick Astwick says the results mean the Society can continue to look to the future with confidence.

“We’ve made some decisions over the past year that have delivered a sound result. We estimate our Affiliated Provider programme has saved an impressive $56 million and expect to see those savings continue. Digital adoption is also up significantly, with logins to My Southern Cross up 151 per cent.

“We’re now turning our minds to our goal of helping Kiwis live their healthiest lives; investing further in the business to deliver continued benefits and exceptional value for members in years to come.”

Southern Cross Health Society now has more than 870,000 members. It retained its Standard and Poor’s A+ financial strength rating for the 17th consecutive year.

Snapshot figures – FY19

• For every dollar received in premiums, Southern Cross Health Society returned 89 cents in claims

• 871,065 members – up 3,472 from last year

• $1,080.4 million premium income (up 9% on the previous year)

• $963.7 million total claims (up 6%)

• A surplus of $10.7 million

• 62% of the health insurance market but pay 73% of claims*

• Investments generated $22.1 million of income, with total investments at $492.5 million by the end of the year

• Standard and Poor’s A+ financial strength rating

In the year ended 30 June 2019, the Society paid 3.2 million claims, including:

• 251,426 surgical procedures

• 499,263 specialist consultations

• 659,377 prescriptions

• 728,281 GP visits

* Based on Health Funds Association of New Zealand data

Accuro launches free mental health aid

Press release from Accuro:

Accuro launches free mental health solution for more than 15,000 members

12 September 2019, Wellington

Easy and quick access to mental health diagnosis and support has been added to the range of services that Kiwis can call on from Accuro Health Insurance.

About 47% of New Zealanders will experience a mental illness and/or addiction at some time in their lives, with one in five people affected in any one year*.

“For many, issues such as depression or anxiety really affect their lives. Yet a lot of people don’t seek help or have issues with their treatment plan.” says Geoff Annals, CEO of Accuro Health Insurance, a not-for-profit health insurer based in Wellington. “The Government announced significant mental health funding this year, yet access to specialists can still be very limited, with long wait times, and can also be very expensive,”

“So Accuro is launching Mental Health Navigator in partnership with Best Doctors. First launched in Canada in 2016, Mental Health Navigator has since launched in Australia and will soon be available in Europe. Accuro members are amongst the first New Zealanders to have access to this service. Mental Health Navigator is completely free for Accuro members to use alongside their specialist insurance cover, which includes a $500 benefit towards further consultations with NZ registered psychologists and psychiatrists, should follow up be required.

The Mental Health Navigator is now available, for everyone covered by an Accuro Specialist Plan, aged 18+. It’s designed to break down barriers by providing fast, comprehensive and confidential access to a team of mental health professionals. A call to the Mental Health Navigator number will be answered by a specialist mental health nurse and followed up within 10-14 days by a video call with specialist psychologists and psychiatrists. This team can diagnose mental health conditions, develop a treatment plan, or act as a valuable second opinion. The mental health nurse then provides follow up support over the next 6-12 months.

“Fast access to diagnosis and treatment is an important part of people getting better before they get worse, and with typical wait times of two to six months through the public system, we feel access within two weeks can make a dramatic difference to a person’s wellbeing,” says Geoff Annals. “Mental Health Navigator is free, and people can access the service without having to leave their own home, an important detail for members who might be fearful of hospital appointments, or have trouble travelling to them.”

“This is the first time such a quick, easy and professional mental health support service has been available to New Zealanders through health insurance. The Accuro Mental Health Navigator joins Best Doctors, SkinVision, our wellbeing Health Hub and bowel cancer screening kits as active benefits that Accuro offers its members in supporting their health before they might need to call us. We call it Active Insurance,” adds Geoff Annals.


Convergence might be the outcome, but it isn't all one way

Sometimes convergence between the New Zealand and Australian financial services legal and regulatory frameworks is considered a given, rather than a useful analytical tool. I use the assumption myself in looking at all sorts of issues, but it is wise to ensure that the assumption of convergence is not unchallenged, or always presented alone, for example. Take KiwiSaver, it is often thought that KiwiSaver will progressively become more like Australian Superannuation. Jeremy Cooper, the Australian Superannuation expert helped the FSC launch its future-casting paper on KiwiSaver in 2050, pointed out the significant structural difference represented by the fact our superannuation is not means tested. That makes planning a heck of a lot simpler: no matter what you manage to accumulate that should be yours in addition to your New Zealand Superannuation payment. While that key feature remains in place, other differences naturally follow - including keeping the contribution rate at a more modest level.

Another difference underlined by Australian commentary relates to insurance (see this AFR piece). Australia has just limited the power of superannuation trustees to automatically add insurance to members' plans. The changes are modest applying only to members under 25 and those with lower balances, but they remind us that the Australian super environment is no more fixed than ours, and convergence, as an idea, can take the form of Australia moving towards New Zealand's views too (where insurance is not permitted in KiwiSaver). 

Overall, scenario planning should always include competing concepts of the future. Anchoring on one as 'most likely' tends to reduce creativity and set in concrete plans that may be best left more fluid. Always, more freedom of action is found by moving to a higher level view, and considering a wider range of options. If you think that your one vision of the future is reasonable, and all the others are unreasonable, then you run a high risk of getting stuck

Professional IQ to be holding clawback-related fees workshop

Professional IQ have announced that they will be holding a workshop to discuss clawback-related fees, or a fee contingent on the customer sustaining a product (usually a home loan or insurance) for a period of time. Virginia Douglas will be presenting. She will be using case studies from complaints about clawback fees to discuss the issues for advisers and what they should be considering when charging a clawback fee and what problems advisers should be looking out for. Click here to register