« September 2020 | Main

What could be the IP impact of "long-COVID"?

A back of the envelope forecast for "long-COVID" impact on IP claims: 

Start with cases - about 1,950 if we are considering current known cases, or whatever number your modelling predicts for whole of pandemic. Assuming very good containment, not much more, let's hope it stays that way. The apply your estimate for "long-COVID" I am using 20% at the moment which gives us about 400 cases in New Zealand. But not all of these will be in employment and own income protection. In fact as 42% of cases are 'imported' we can assume that most of those do not own income cover issued by New Zealand insurers. That leaves us with roughly 240 cases. FSC underinsurance research showed income protection cover at about 20% of the market - or a possible 48 cases of 'long-COVID' where a claim may be possible.

Well, well, within the capability of the industry to manage. Economic impacts on people that have claims from other causes are likely to be more problematic. 


Legal and regulatory update for the life and health sector

28 Oct 2020 – Financial Services Council media release at the time of the AGM advised of a solid year of member growth and increased revenues. https://www.fsc.org.nz/site/fsc1/Media%20Releases/Financial%20Services%20Council%20-%20Annual%20General%20Meeting%20-%20Media%20Release.pdf

30 Oct 2020 – RBNZ signed the ‘IBOR (Inter-bank offer rates) Fallbacks Protocol’ published by the International Swaps and Derivatives Association (ISDA). https://www.rbnz.govt.nz/news/2020/10/rbnz-signs-isdas-ibor-fallbacks-protocol

30 Oct 2020 - The Commerce Commission published a statement of preliminary issues relating to an application from Aon plc seeking clearance to acquire Willis Towers Watson Public Limited Company as part of a global transaction. https://comcom.govt.nz/case-register/case-register-entries/aon-plc-and-willis-towers-watson-public-limited-company

30 Oct 2020 – AMP announced the receipt of an indicative, non-binding, conditional proposal from Ares Management Corporation, a US-based company, to acquire 100 per cent of the shares in AMP Limited by way of scheme of arrangement. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AMP/362281/333930.pdf


Fidelity Life appoints new CEO, and more daily news

Fidelity Life has announced the appointment of Melissa Cantell as the new CEO. Cantell is set to come into the role on 25 January 2021. Cantell will leave her current role as Chief Operating Officer at IAG NZ. Cantell has held various managerial roles and has experience in different areas of business. Until Cantell’s appointment, Simon Pennington and Adrian Riminton will continue as acting CEOs.

“Melissa Cantell has been appointed chief executive at Fidelity Life, replacing Nadine Tereora who left in May 2020.

Cantell has strong executive leadership experience running successful commercial operations across a range of industries. She joins us from IAG NZ where she held the role of Chief Operating Officer, and prior to that was the Executive General Manager Transformation.

She has accumulated a broad range of experiences over her career, from mergers and acquisitions strategy and business transformations to senior general management roles with Fonterra and Coca-Cola Amatil. She loves building great customer, adviser and people experiences, especially in times of change, and is passionate about the role insurance plays in the New Zealand community.” Click here to read more

In other news:

FSC: Understanding conflicts of interest and managing gifts and incentives webinar

Southern Cross: Travel Insurance: Are your clients failing to understand this insurance policy?

The role of a CEO in driving diversity and change


Fidelity Life appoints new CEO

Fidelity Life has announced the appointment of Melissa Cantell as their new CEO: 

While Melissa doesn’t officially start with us until 25 January 2021 I wanted to let you know a bit about her and her background.

Melissa has strong executive leadership experience running successful commercial operations across a range of industries. She joins us from IAG NZ where she held the role of Chief Operating Officer, and prior to that was the Executive General Manager Transformation.

Melissa has accumulated a broad range of experiences over her career, from mergers and acquisitions strategy and business transformations to senior general management roles with Fonterra and Coca-Cola Amatil. She loves building great customer, adviser and people experiences, especially in times of change, and is passionate about the role insurance plays in the New Zealand community.

We’re making great progress with our customer-focused transformation and remain firmly focused on achieving our 2025 goals and delivering sustainable growth. Melissa will look to build on that momentum, even as we continue to deal with COVID-19 and the economic uncertainty ahead.

The year ahead is really important for you and us: evolving our customer and adviser experiences, helping you transition to the new licensing regime, successfully completing our digital transformation project and moving to brand new offices are just some of the challenges awaiting us in 2021.

Until Melissa joins us, our CFO Simon Pennington and myself will continue as joint acting CEOs.

Thanks for your continued support and I look forward to introducing Melissa to you.

Cheers,

Adrian Riminton
Chief Distribution Officer
Joint acting CEO

 


Partners Life awarded 5 star rating for 10th consecutive year, and more daily news

Partners Life has been awarded a 5 star rating from the Lewers Life Insurance Benchmarks Study for the 10thconsecutive year. This award is symbolic for Partners Life as it has been awarded a 5 star rating every year since first beginning operations. The Lewers Life Insurance Benchmarks Study works to evaluate the satisfaction of independent financial advisers.

“For the 10th year in a row, we’re very excited to announce we have received a 5-star rating from the Lewers Life Insurance Benchmarks Study.  What makes this extra special is that we have achieved this rating every year since we first opened our doors 10 years ago; the only Life Insurer to achieve a consistent 5-star rating over this entire time.

The Lewers Life Insurance Benchmarks Study measures the satisfaction of independent financial advisers in New Zealand, and this achievement reaffirms for us that we are servicing our financial advisers and as a result their customers, to the highest industry standard.”

More than 300 advisers from across the country participated in the study. Partners Life anticipated a lot of feedback as a result of many changes and amendments being introduced during the past year. Partners Life has acknowledged that the response from other insurers and has said that it is essential for sustainability.

“The Lewers Life Insurance Benchmarks Study was completed by over 300 independent advisers across the country who provided their views on the delivery of all insurance providers in the New Zealand market. In 2020 they spoke to a larger cross section of advisers who deal with Partners Life than in previous years; a critical element in gaining greater depth of feedback on the initiatives we introduced over the past 12 months. We knew that some of the changes we had introduced in the past 12 months would garner significant feedback. Specifically we anticipated there would be a strong reaction to our leadership position in introducing DI product and pricing changes in early 2020 to address the sustainability of the product in the New Zealand market long-term, and we really do appreciate your feedback on how we were placed competitively because of this.  It is heartening to us to see that since the study was completed, there has been significant competitor movement to follow our lead – something we believe is essential for the sustainability of this product line.”

In other news:

Fidelity Life: Senior Marketing Manager role is currently being advertised

FSC: New disclosure regulations: practical implementation webinar

Partners Life: New Adviser Training Course Registration

Partners Life: Ross’s Story


Legal and regulatory update for the life and health insurance sector

27 Oct 2020 – Takeovers Panel extended COVID-19 class exemptions for capital raising from 31 Oct to 31 Dec 2020. https://www.takeovers.govt.nz/about-the-panel/news/covid-19-class-exemptions-for-capital-raising-extended/

27 Oct 2020 – Privacy Commissioner posted information on the website that, from 1 December, businesses and organisations that send personal information overseas will need to comply with new privacy Principle 12 in the Privacy Act 2020, which adds new controls on the disclosure of personal information to overseas organisations and businesses. https://www.privacy.org.nz/news-and-publications/statements-media-releases/new-principle-for-disclosing-personal-information-overseas/


Science behind high Income Protection premiums, and more daily news

Recently we reported that Income Protection prices are on the rise as a result of the Australian market and COVID-19. New Zealander insurers are now being urged to amend processes and premiums before regulators intervene and introduction mandatory guides. Partners Life begun the conversation when revealing that it has increased IP premiums by 12% and made policy changes. Kris Ballantyne, chief marketing officer, has said that Partners wishes to offer affordable policies that customers can maintain for as long as they need. AIA and Cigna have both noted that they aren’t looking to introduce significant premium increases.  

“It took insurer Partners Life to break the silence last month when it revealed a brave plan to start publishing the content of discussions with the Financial Markets Authority.

 

In doing so, it revealed it lifted its income protection premiums by 12 per cent in the past year, and had made policy changes, including not allowing self-employed people to any longer select an “agreed value” of income to be covered, instead limiting cover to actual loss of earnings.

 

Partner’s Life’s chief marketing officer Kris Ballantyne said the company was a “first mover” on income protection, driven by wanting to provide policies they [consumers] could afford to keep as long as they needed it.

 

It was a big challenge as there were a lot of agreed value policies covering self-employed people, and owners of small businesses.

 

Neither of its two big rivals, AIA nor Cigna, was expecting to make such large premium increases, though AIA had stopped selling new policies in which the income covered automatically increased by 5 per cent a year.

 

AIA chief product officer Len Elikhis said that over time, “the insured’s benefits would creep up and approach the insured’s income”.

Shane Burdack, senior underwriting consultant as Swiss Re Australia highlighted that customers with significant wealth had very little incentive to return to work when on claim, resulting in increased premium prices.

“Swiss Re senior underwriting consultant in Australia, Shane Burdack, said that in New Zealand insurers gave little thought to the net wealth of policyholders.

 

Yet people with significant wealth – sometimes through investments, sometimes because of payouts from other insurance policies – had a low incentive to go back to work, and stayed “on claim” for longer driving up costs.” Click here to read more

  

In other news

nib: nib takes place among top 100 most diverse firms worldwide

Southern Cross: Southern Cross is offering members a $149 voucher when they join Snap Fitness on a minimum 12-month term

Southern Cross: Southern Cross is offering members 10% off the retail price of a monthly LES MILLS On Demand subscription

 

 

 


Core services focus by banks sees them exit insurance

Current economic conditions are accelerating a recent trend in banking - a focus on core services - as evidence, we offer this series of announcements:

Alongside this, traditional branch services are being cut or slimmed down. This shift to digital was given a further shove by lockdowns so the time is right to re-appraise the value of each branch in the network. In addition to that, the value of each service in the branch is being reconsidered as well. With the decision by ANZ to withdraw from offering cash foreign exchange services being announced: https://www.stuff.co.nz/business/123131192/anz-to-stop-offering-foreign-currency-citing-drop-in-demand-due-to-covid19 

Although perhaps this is not just about economic conditions, but also competitive ones. Digital disruption is coming to the world of banking. A slew of online and consumer lenders has been grabbing attention (and high valuations) on the ASX. More challengers are likely to come. This is prompting a strategic rethink by several banks. The regulatory environment is shifting as well, creating more space for the change:


Legal and regulatory update for the life and health insurance sector

21 Oct 2020 – Department of Internal Affairs published a new webinar on the AML/CFT enhanced customer due diligence obligation on its website. https://www.dia.govt.nz/Enhanced-Customer-Due-Diligence-Webinar

22 Oct 2020 - Simone Robbers, RBNZ Assistant Governor & General Manager of Governance, Strategy and Corporate Relations, delivered a speech to the 16th Annual Financial Markets Law Conference titled “Working together to support economic recovery, strengthen resilience, and develop culture”. https://www.rbnz.govt.nz/news/2020/10/working-together-to-support-economic-recovery-strengthen-resilience-and-develop-culture

22 Oct 2020 – FMA released a consultation titled “Recognition of Australian adviser qualifications”, relevant to the upcoming financial advice provider regime, with submissions closing on 20 Nov 2020. https://www.fma.govt.nz/compliance/consultation/consultation-recognition-of-australian-adviser-qualifications/

20 Oct 2020 – MBIE published information on its website an update on COVID-19-related business relief measures, noting that some have been extended, while others are no longer available or are soon to expire. https://www.mbie.govt.nz/about/news/update-on-covid-19-related-business-relief-measures/

21 Oct 2020 - The first statement defining the purpose of New Zealand’s retirement income system was released by the Retirement Commissioner. https://cffc.govt.nz/news-and-media/news/purpose-of-nz-retirement-income-system-defined/