The FMA is looking into an adviser that recommended clients move savings into more conservative accounts during Level 4 lockdown. The FMA has stated that this advice could cause great damage to clients. Clients that accepted the advice provided in a mass email would have locked in the losses caused by the market volatility. As a result of the adviser’s actions, the FMA has reminded the public that they should consider all options before making any changes.

"The AFA sent a bulk email in March 2020 to clients urgently recommending they move their savings in KiwiSaver and other funds to less risky options.

The FMA was alerted to the communication after receiving a complaint from one of the adviser’s clients.

FMA head of supervision James Greig said the advice was inappropriate and had the potential for significant harm.

"The FMA has a low tolerance for poor conduct that poses risk to customers as a result of the Covid-19 crisis, especially because New Zealanders are looking for financial guidance at this time.” Click here to read more

In other news:

FMA: Providers working to help panicked switchers

PartnerRe: PartnerRe announces two new CEOs

Partners Life: New independent director at Partners Life

Is a brokerage no longer a “lifestyle” business?

Reserve Bank: Reserve Bank governor believes rates can go lower

My latest piece, on income protection underwriting, is at goodreturns: https://www.goodreturns.co.nz/article/976516899/ip-underwriting-is-complicated-improving-but-complicated.html 

Fidelity Life announces departure of CEO

Life insurer Fidelity Life has announced the resignation of CEO Nadine Tereora. Nadine has indicated she wants to spend more time with her family and this will be her final week at Fidelity Life.

Fidelity Life Chair Brian Blake says he’s disappointed to lose Nadine after three and a half years.

“During Nadine’s tenure as CEO Fidelity Life secured a $100 million cornerstone investment from the NZ Super Fund, won the ANZIIF New Zealand Life Insurance Company of the Year Award for three consecutive years and maintained our position as New Zealand’s largest locally owned life insurer.

“I’d like to thank Nadine for her service and wish her and her family all the very best for the future.”

Mr Blake emphasised Fidelity Life is in good shape: “We have a strong team, we’re in a strong financial position and we’re well-placed moving forwards.”

The challenges posed by Covid-19 have been navigated well so far, and the company’s transformation strategy is tracking well, with the recent launches of a refreshed brand and new wellbeing app, Sharecare, being great examples.

Fidelity Life’s Board will commence the search for a new CEO immediately. In the meantime, Chief Distribution Officer Adrian Riminton and Chief Financial Officer Simon Pennington have been appointed as joint acting CEOs to provide continuity for Fidelity Life’s people, as well as for customers, advisers and partners.

“We remain firmly focused on a successful and sustainable future with our customers at the heart of everything we do,” said Mr Blake.

Ends

Adrian Orr has highlighted that the financial system is sound enough to overcome the economic impacts of COVID-19. Although banks have coped well with the pandemic, the Reserve Bank has stated that insurers and non-bank lenders are more vulnerable.

“The Reserve Bank said in the central bank's annual report on financial stability published on Wednesday that banks had coped well with the coronavirus pandemic so far.

But under "severe enough scenarios, the viability of banks would come into question", it warned.

In the event of its worst-case lockdown scenario "initial modelling suggests that, without significant and timely mitigating actions, banks would fall below minimum capital requirements under this scenario," it said.

The Reserve Bank has also cautioned that some other financial institutions that take deposits from the public, and some life insurers, are already more vulnerable.” Click here to read

In other news:

FSC: Advisers more important than ever

COVID-19 exposing New Zealanders’ financial vulnerability

Retirement Commissioner: Collective effort from advisers needed

Take care before jumping on insurance relief, FMA warns

AIA: Fitch runs Covid-19 ruler over industry

EQC apologises for leakage of claims info

Cigna has made price changes to a number of products. The range of the changes are detailed in the table below. You can tell from the variety of changes that this is a complete repricing exercise - not merely an increase or decrease of a blanket percentage. Some prices will be much more competitive. Some segments are being increased. The only way to know for certain, is to do a comparison for each life. That's why a price comparison across the market is vital if you wish to offer help to clients seeking the most competitive products. Quotemonster still offers free price comparisons for financial advisers with an FSP number and an email account. 

In other news:

AIA: Mentemia, a mental wellbeing app, is now part of the AIA Vitality program.

AIA: Clients can get one month’s premium free when they apply for a new eligible AIA policy between 5 March 2020 and 31 May 2020 and have the policy issued by 31 July 2020.

Partners Life: The automatic COVID-19 Mental Health exclusion that was applied to disability and business risk benefits has been replaced with more targeted and specific underwriting processes.

Partners Life: Clients who had the automatic mental health exclusion applied will have it replaced with an emergent mental health exclusion.

Partners Life: Underwriting restrictions 2020

Duncan Grieve writes about the media situation in New Zealand after the incredible news of Stuff being sold for $1 to management. The article is well worth a read. In an economic sense I felt it was awesome advocacy for Schumpeter's creative destruction - a celebration of how new ideas emerge in surprising places, and times. Innovation does occur in large companies, but not usually in very comfortable and monopolistic ones. Disturbance, challenge, and necessity - these drive change. What changes shall we see in the insurance sector as a result of the great shove that 202 has given everything? Well, finally digital moved to the top of the queue for many companies, after languishing for a long time. Product design is definitely under pressure. FSLAA and COFI are going to deliver additional shocks - on top of the economic ones to distribution. 

A study carried out by Coredata and commissioned by the FSC has revealed the immediate impacts of COVID-19 on New Zealanders. While we have been lucky with the low number of confirmed cases and deaths, COVID-19 has imposed uncertainty into all our lives. The study revealed that 50% New Zealanders felt that COVID-19 was impacting job security. Similarly, the study found that the interest in low-risk investments has increased by 20% from March to April 2020.

“The first survey in a major new series commissioned by the Financial Services Council has revealed that COVID-19 has delivered an unprecedented hit to New Zealanders’ financial resilience and well-being.

The Financial Resilience Index tracks how Kiwis feel on five key financial indicators from March 2020 onwards and provides a unique perspective on how we feel and think about financial issues over this unprecedented time.”

A similar study in Australia was carried out by Coredata, in this study it was reported that 51.7% of participants relied on personal savings as a safety net while 29% of participants didn’t have any safety net set in place. The same study found that only one in five have had discussions about their mortality with friends and family. Click here to read more

In other news:

nib: nib have partnered with Clearhead, a mental health technology company to help expand its service offering.

Fidelity Life: Fidelity Life to move to new office building in Auckland CBD after selling Fidelity House

Fidelity Life: Craig Winterburn, GM Retail Sales and Key Partnerships, is set to leave Fidelity Life

Coronavirus: Elective surgery catch-up could take years

Tower: Tower Insurance embarks on digital customer engagement push

nib: Insurer says online application platform has had “fantastic feedback”

Warning association numbers could fall

We have an unparalleled opportunity to try new things. 

My daughter loves to skate - mainly roller skating, which she also teaches - and so wanted to go ice-skating for her birthday. At the rink in between helping my youngest son who is rather wobbly I saw some truly impressive skating. There were a few skaters who were amazing: leaps, spins, and tricks. They could skate fast, elegantly, and do some amazing things. 

They also fell over a lot. 

Talking about skating with my daughter afterwards I said that the person I saw fall over the most was also the best skater on the rink that day. She explained to me that her coach talks about the need to fall over more often when they meet. Mistakes in the coaching context mean attempts to learn - and the biggest obstacle to achievement isn't mistakes, it's fear of failure - because we don't make 100% of the moves we never try. It's obvious really. 

In an insurance context there are, of course, things we should not screw up. We can't be careless with clients trusting us to be reliable. But we also cannot use that as an excuse for inaction on all fronts. Our training sessions can include new ideas. Our new policies and procedures should include some attempts to create new standards. Our marketing development meetings demand several more concepts than we are going to use - I have long since overcome reluctance to pay for things that might not work. All new ideas can be carefully reviewed before using them in the field - but I like it when I budget for failure now. I like it when I can delete draft blog posts - good quality work comes from trying many things, and discarding those that don't make the grade. I aim to create some work that I will not use.

After the weekend's ice skating, I'm emboldened to try more new things. 

Is it time you tried something new? 

In light of the past two months, Martin Stokes, MAS CEO, has said that the insurer is open to the idea of remote working. Stokes highlights the slow adoption of flexible work options in past years has been accelerated by the lockdown. MAS will use events during the lockdown to inform future working arrangements.

“Medical Assurance Society (MAS) chief executive Martin Stokes (pictured) says that the past six weeks have been a kind of mass social experiment, and, as a result, the workplace flexibility trends that were already emerging have been accelerated massively. He says the level of productivity in some areas has been surprisingly high in a remote environment, and, as a result, a much higher level of flexibility will become the norm.

“This situation has identified for us the opportunities that would otherwise likely have emerged over a much longer period of time,” Stokes told Insurance Business.

“Social trends would have influenced people’s thoughts around where they wanted to work, flexibility, different working arrangements, etc. But that’s really been concentrated into a six week-long social experiment where everybody’s had a taste of what that’s like enforced upon them.” Click here to read more

In other news:

Will corporates embrace remote working? - will this moment change everything, or will they slip back into old ways of working?

TAP: are offering to help advisers with claims

FMA: FMA urges public to pay attention to terms of insurance relief

Pepper Money: Pepper writes 600 NZ loans in first year

Financial Advice New Zealand have compiled an easy to follow guide to hardship response of all major insurers and banks.  

COVID-19 hardship offerings by insurers

COVID-19 hardship offerings by banks