moneyblog

Australia: ASIC set to ban cold calling

The Australian Securities and Investments Commission (ASIC) is set to ban cold calling for life and consumer credit insurance sales from January 2020. This has change has been justified as addressing poor sales practices that ASIC believes has led to unfair consumer outcomes. This ban will not apply if the marketer provides the person they are calling with personal advice. It is another sign of the shift in conduct expectations that creates an incentive for a financial provider to choose to step into advice provision and the supervisory regime that surrounds it. We may experience similar incentives in this market. Click here to read more

 

South Africa: family take corpse to insurance company

A grieving family in South Africa took the corpse of their dead relative to the insurance company office after the insurer delayed payment of funeral insurance without sufficient paperwork to prove he was dead. "We thought if the documents do not give them enough answers then maybe the body will."

Click here to read more. 

I am so grateful that we live in a country with little corruption that documents and officials are generally believed, and virtually every life insurance claim is paid, and paid quickly. 

 

 

The missing customers, the missing new business

This article from The Economist discusses how companies from Silicon Valley are creating products that are much more suited to males than females, alienating half of their potential customers. This is in some surprisingly obvious ways: most mobile phones and gaming devices are simply too big for most women's hands to use with as much comfort and utility as the average man using the same device. This is my my wife persists with her ancient, but correctly sized, iphone SE, rather than choosing to upgrade. It's a huge lost opportunity. If you read the article you can easily feel smug - as I did - about the silly mistakes these silicon valley geniuses make - like trusting the design decisions to teams that are 75% male. But there's another part of me worrying - what are we missing? Here are two examples: 

We're missing out on women. Looking at several hundred thousand quotes, 43% of quotes arose from couples and 57.4% arose from quotes for single adults. Men were quoted for insurance on their own at a rate twice that of women. Increasing the engagement of women quoting alone to that of men would be a 20% boost to quotes for the industry. In the advised channel we are not quoting single women as often, and when we look at cover levels for women, they remain lower than for men. Remember that with declining marriage rates women tend to remain single, or if in relationship, financially independent, for longer, which expands the impact of this industry weakness. There is nothing like this skew in direct insurance.

In Auckland we're also missing out on adequately serving the multi-adult household, which now accounts for 30% of all households in this region, by featuring mainly traditional families. We're missing out on women, big time. The  We're missing out on genuine connection to client needs - by talking about insurance all the time, and not about health, risk, or the great purpose of financial risk transfer. Where there are people with a financial dependence on each other, there is usually a need for insurance. Marketing to that segment with a new solution to the challenge of making sure the benefit goes for its intended purpose would help. 

There are more, and they require detailed evaluation. The solutions to accessing ignored segments is not straightforward. All change is difficult. It's an example, however, that the industry needs to change to reflect changes in society around us. While it might be embarrassing to be talking about selling more to single women in 2019, it would be even more embarrassing to be still talking about it as a problem in 2029. While the housing crisis has been in the news almost every week for the last five years, we do not appear to have recognised one of the most obvious consequences: more shared housing. 

More details will be in the Quarterly Life and Health Sector report. 

 

Chatswood premium comparison database v107

A new version of the premium comparison database has been released. The most interesting part of the release is the new 'Price Change History' feature. There is a new button labelled ‘Price Change History’ in the menu - see image below. 

This opens a list of historical price changes, which can be easily searched by Benefit, Company and Date. So, for example, you can see what price changes have been made to Income Protection benefits over time, or the change history for a particular company. 

Insurance Law Reform Intentions Announced

Minister's announcement can be found at this link: https://www.beehive.govt.nz/release/insurance-contracts-become-easier-understand-and-fairer-consumers

Changes the Government has agreed on include:

• Placing the responsibility on insurers to ask consumers the right questions when processing new insurance policies, rather than leaving it to consumers to know what to tell their insurer
• Requiring insurance policies to be written and presented clearly, so that consumers can easily understand them
• Ensuring insurers respond proportionately when consumers don’t disclose something they should have, or misrepresent themselves
• Strengthening protections for consumers against unfair terms in insurance contracts
• Extending powers to the Financial Markets Authority to monitor and enforce compliance with new requirements

Most of this is uncontroversial in concept. Much of it is recognition of current practice. But the challenge, as always, is in the details. There is broad potential to get bad law from good ideas. That is why it is particularly good to hear that there will be more consultation than it was suggested at one stage. 

MBIE's page with a lot more detail is at this link: https://www.mbie.govt.nz/business-and-employment/business/financial-markets-regulation/insurance-contract-law-review/ 

Why are Americans dying younger?

The Economist has this article on the curious decline in life expectancy in the United States. It's complicated, but apparently systemic, and clustered in economically deprived areas of the country. Link. 

Australia: compliance is 15% of the cost of advice

Angela Martyn, a financial planner in Melbourne has revealed that her practice spends $4.50 for every $100 of revenue on compliance – including personal indemnity insurance, industry memberships, audits and training. Martyn has said that personal indemnity insurance makes up much of the cost. The labour required for these things is $9 of every $100 of revenue. Additionally, she spends $1.50 per $100 revenue on marketing. Martyn has said that she expects that compliance spending will increase to 15% – 17% of their revenue. Or put it another way, 15% of the cost of advice will be compliance. 

Quotemonster's latest news

In case you missed it here is a link to the most recent Quotemonster newsletter with all the latest news on changes and additions to the site. 

Fidelity Life: Life Insurance Company of the Year .... again!

Congratulations to Fidelity Life for taking home the ANZIIF Life Insurance Company of the Year for the third consecutive year. 

Fidelity's Head of Strategic Allilances, Ben Holloway also won Young Insurance Professional of the Year (pictured below with Nadine Tereora).

Facebook and Google set to expand respective financial services

Earlier this month Google and Facebook announced that they will expand the scope of their financial services by developing a Google checking account and a digital wallet that will be integrated across all Instagram services. Although these services are set to make our lives simpler, adding our financial data to their existing database allows Big Tech companies to understand our risk tolerance, buying habits, track our shopping behaviour as well as our loans and credit card exposures. Click here to read more