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 Aon look to acquire Willis Towers Watson, and more daily news

After announcing its acquisition plans in March 2020,  Aon has submitted an application to the Commerce Commission to acquire Willis Towers Watson. Aon is looking to incorporate the five Willis Towers Watson offices across the country into wholly owned subsidiaries.

“New Zealand’s Commerce Commission has received Aon’s clearance application to acquire the entirety of Willis Towers Watson, as part of a global transaction.

The step was revealed by a statement from the commission, which is New Zealand’s competition, consumer and regulatory agency.

In New Zealand, Aon and Willis Towers Watson both offer a range of insurance brokerage services, including for commercial insurance, reinsurance, group health and welfare benefits, and personal and life insurance. Both firms also provide investment consulting services to institutional investors.

Aon has 58 offices across New Zealand, while Willis Towers Watson has five – Auckland, Wellington, Christchurch, Tauranga, and Dunedin.

Under the proposed transaction, Willis Towers Watson will become a wholly owned subsidiary to Aon. According to the Commerce Commission, it gives clearance to a merger application if it is able to successfully prove that that the deal is unlikely to have the effect of substantially lessening competition in a market.” Click here to read more

In other news

AMP KiwiSaver scheme to go passive, and slash fees

Strategi: The new Privacy Act 2020 2pm webinar

RBNZ: Reserve Bank seeks to preserve benefits of cash


Fluctuations in Income Protection prices, and more daily news

The New Zealand Herald have reported on Income Protection price increases. Financial advisers have credited the changes to IP to the Australian IP market although COVID-19 has played a role in the change in pricing and the underwriting process. During the FSC digital Generations 2020 Conference, Kimberley Robinson from Swiss Re Australia warned that it was important that New Zealand insurers make amendments. Robinson highlighted that in Australia the regulator had to step in after losses totaled A$3 billion in a five-year period. Robinson said that the losses were a result of an increased focus on sales volumes, cross-subsidisation, a competitive market, and in some instances, insurers providing more benefits on claims before claim time.

At an industry conference held online this week by the Financial Service Council insurance underwriter Swiss Re warned that New Zealand insurers also needed to make changes.

Kimberley Robinson, product solutions leader at Swiss Re in Australia, said Australian regulator APRA had intervened after big losses in the sector which added up to around A$3 billion over five years.

"We have suffered losses on individual income protection on an unsustainable level."

Robinson said factors contributing to those losses included an increasing focus on sales volumes over profitability, cross-subsidisation of the product and a fiercely competitive market.

"In some cases we were providing customers with more benefit on claim than they earned before claiming."”

To tackle issues relating to sustainability and customer support, the FSC recently set up a CEO life insurance forum and ran its first meeting. Although Richard Klipin didn’t comment on the pricing of IP, he noted that the sector is not growing and that it is instead expanding sideways. Klipin highlighted that the challenge for the industry to transforming insurance into something that is relevant, affordable and accessible. He continued by saying that insurers need to focus on having the ability to deliver on the promise of cover

In other news

nib: nib is sponsoring the Norwood and Miraka Limited Charity Golf Tournament for a third year

Advisers on Banks survey results revealed


Legal and regulatory update for the life and health insurance sector

19 Oct 2020 – Privacy Commissioner launched NotifyUs, a new online tool enabling businesses and organisations to easily assess whether a privacy breach is notifiable. https://www.privacy.org.nz/news-and-publications/statements-media-releases/office-of-the-privacy-commissioner-launches-privacy-breach-reporting-tool/

20 Oct 2020 – RBNZ released draft guidance on what regulated entities should consider when managing cyber resilience. The consultation on the draft guidance closes on 29 Jan 2021. https://www.rbnz.govt.nz/news/2020/10/reserve-bank-releases-guidance-to-help-build-cyber-resilience


Results of FSC Financial Resilience Index, and more daily news

The FSC has released the latest Financial Resilience Index results. The latest results indicate that New Zealanders are still resilient and confident about financial matters. The index examined views on five indicators: financial confidence, literacy and preparedness, job security and wellbeing. 72% of participants reported that they feel reasonably, very or extremely confident in their financial standing.

“The latest round from the FSC’s Financial Resilience Index shows that despite the last six months being one of the most challenging periods in recent history, New Zealanders have remained remarkably resilient and confident when it comes to financial matters.

The Financial Resilience Index is a major tracking survey of New Zealanders’ views on five key financial resilience indicators: financial confidence, literacy and preparedness, job security and wellbeing.

“The responses in early August show that after initial uncertainty Kiwis remained resilient throughout this unprecedented period, from the introduction of Covid-19, to living in lockdown, right through to the return to alert level one,” says Richard Klipin, FSC chief executive.

“Despite these dramatic changes, New Zealanders continued to have incredible financial confidence, with around 72% of respondents still feeling reasonably, very or extremely confident when it came to their finances.”

The index found that although there is underlying anxiety, New Zealanders remain resilient. The FSC’s findings differs from the key findings of Cigna’s COVID-19 Global Impact Study, which highlighted that the majority of its 20,000 participants have a pessimistic view on their financial position.

In other news

Cigna: Cigna Parenting Survey 2020 found that 36% of parents surveyed had a will but no life insurance

FMA revealed that full licence provisions would be released mid-November  during FSC conference

Financial Advice: New board members announced at Financial Advice NZ


Cigna COVID-19 Global Impact Study insights, and more daily news

Cigna has published its COVID-19 Global Impact Study.  The study examined the financial confidence of New Zealanders before and after the arrival of COVID-19 to New Zealand. Cigna built on data from the Cigna 360 Well-Being Index. The study is primarily based on data collected from May 2020 to August 2020 to understand the change in attitudes. The study that had over 20,000 participants found that New Zealanders are becoming more pessimistic about their financial position.

“Our Cigna COVID-19 Global Impact Study: Resilience and Well-Being through the Pandemic* shows that New Zealanders are becoming increasingly pessimistic about their financial position, which highlights the increasing importance of financial advisers in supporting our customers through this time of economic uncertainty.  

This latest study builds on the data we’ve collated since 2014 through our Cigna 360 Well-Being Index which tracks perceptions about the health and well-being of people across our international markets.

Our 2020 study includes data collected from May to June and July to August to understand people’s changing attitudes to the unfolding COVID-19 crisis.” 

The study found that the views of New Zealanders coincided with views of others around the world. The financial confidence of those surveyed in all markets was generally dim, with 49% of participants expressing that they have the worst possible outlook on the impacts of the economic environment on their financial situation. Cigna has noted that New Zealanders are in need of good advice during this time and said that it will continue to monitor attitudes.

“The impacts of COVID-19 on New Zealanders financial well-being fall broadly into line when compared to other international markets. Across all markets surveyed 49% of respondents continue to have the worst possible outlook on how the economic environment will impact their financial situation and their ability to maintain current standards of living.

Now more than ever New Zealanders need access to good advice. Together we can leverage insights such as these to build confidence, put advice front of mind, and ensure we continue to meet the changing needs of New Zealanders.

 

We’ll continue to monitor how New Zealanders’ attitudes towards our wellness measures change over the coming months and will share any significant changes with you.” Download CIGNA - RESILIENCE & WELL-BEING THROUGH THE PANDEMIC SEP 2020

In other news

FSC: Financial Services Council chairman Rob Flanagan said he was proud to see how the group’s members came together during the Covid-19 pandemic

RBNZ: The Reserve Bank predicts that the economy will not reach levels seen in 2019 until 2022

Fidelity Life: FY20 annual results have been published

(Chatswood will update the industry financial performance index and individual financial performance charts in the quarterly life and health report for the quarter to 15 December which will be issued by 20 December so you can add it to your holiday reading pile). 


Legal and regulatory review for the life and health insurance sector

16 Oct 2020 – Privacy Commissioner website provided details for the next PrivacyLive Forum to be held during Privacy Week on 5 November 2020, with the presentation focused upon the Privacy Act 2020, due to come into effect on 1 Dec 2020. https://www.privacy.org.nz/resources-2/forums-and-seminars/privacy-live-our-speaker-series/

19 Oct 2020 – FIU released the monthly AML/CFT September 2020 Suspicious Activity Report including, for example, a link to the FATF September 2020 report titled “Virtual Assets Red Flag Indicators”. https://www.police.govt.nz/sites/default/files/publications/fiu-monthly-report-sep-2020.pdf


Asteron Life appoints new CEO, and more daily news 

Suncorp New Zealand has permanently appointed Jimmy Higgins as CEO. Since the departure of Paul Smeaton in July Higgins has been the acting CEO. Higgins joined Suncorp Group in 2008 and has had various roles within the company. Suncorp Group CEO Steve Johnston has said that Higgins is highly experienced and has a deep understanding of the industry.

“Suncorp New Zealand has today announced the appointment of Jimmy Higgins to the role of Chief Executive Officer, effective today.

Higgins joined Suncorp Group in 2008 and has held a range of senior and executive positions across its Australian and New Zealand insurance businesses. Prior to being appointed acting chief executive, he held roles in the New Zealand business as CFO and executive general manager, claims.

Before joining Suncorp, he was a Chartered Accountant specialising in audit and forensic accounting.

Suncorp Group chief executive Steve Johnston says Higgins is a highly experienced financial services executive with a deep understanding of the insurance industry and New Zealand insurance market.”

Higgins noted that he is proud to be part of Suncorp New Zealand and that he is excited to lead it towards the future.

“Higgins says: “Our business is uniquely positioned to make a difference in the lives of Kiwis and I’ve always felt very proud to be a part of that.

“Suncorp New Zealand has gone from strength to strength in recent years and I’m excited to lead a team of truly passionate people as we shape our business for the future and continue to deliver more for our customers and intermediary partners.”” Click here to read more

In other news

nib: Putting Health into Life and Work Seminars to be held at North Harbour Stadium on Tuesday 20th October from 9:00am - 11:00am

nib: Putting Health into Life and Work Seminars to be held at Riccarton Park Functions Centre on Thursday 22nd October from 12:00pm - 2:00pm

Regulator on poor processes and bad outcomes

Income protection: Lessons from over the ditch


FSC Session: Professional Advice - Get In Shape: The Next Bite of the Apple, supported by Chatswood Consulting

Day 2 of the conference kicked off with the Professional Advice - Get In Shape: The Next Bite of the Apple session. This session was sponsored by Chatswood and saw Richard Kliplin lead the current and relevant regulatory discussion with Sharon Corbett, John Botica, Angus Dale-Jones, and Derek Grantham. During the session viewers had the opportunity to hear from MBIE, the FMA and the Code Working Group. The insightful session revealed key licencing stats and offered commentary on CoFI and FSLAA. The session allowed viewers the opportunity to ask the regulator questions. It was great to see many viewers utlising the ask a question feature on offer. Questions included:

·       When will the FMA release the requirements for a financial advice provider full licence, and the final standard conditions?

·       Will the FMA do anything to smooth full licence applications across the 2 year period or deal with the rush towards the end of the period?

·       What are the expectations around serving existing clients (pre-FSLAA), and how are these expectations reflected in the duties in the law or the CODE?

·       There are two places in the transitional licence application where the user experience is unintuitive. What are the FMA doing to ensure that the user experience in full licence applications is intuitive, and applicants won’t get stuck unnecessarily?

 

FSC day 2 Oct 14 3FSC day 2 Oct 14 3

 


Financial Advice Trusted Adviser launches, and more daily news

Financial Advice has launched its Trusted Adviser mark although the public launch is scheduled for February 2021 to coincide with the new regime. The Trusted Adviser mark looks to recognise and award advisers that meet the set requirements.

“The Trusted Adviser mark is awarded to those Financial Advice NZ members who show they have committed to qualifications and continuing professional development obligations at a level higher than that required by New Zealand law and code.

The public launch of the mark is scheduled for February 2021 to coincide with the new financial advice regime coming into effect the following month. At that time when the AFA and RFA designations disappear, qualifying Financial Advice NZ members will have this new designation to show the public that their high level of qualification, experience and ethics has been recognised by a professional body.”

Those that meet the amended requirements can now apply to have the accreditation before the new regime.

“Applications are open now so qualifying advisers can have the Trusted Adviser mark ready before the March 15 2021 new regime.

After the feedback received during the consultation phase, some of the criteria has been amended in line with your views. Please review the application details as many members are not required to apply, only register, as we already know they meet the criteria. Click here to apply

In other news