Quality Product Research: Medical – proposed rating for Product Flexibility

Introduction

Recently, we read an article on Risk Info NZ about Accuro removing their time restriction for members, and former members, who want to make a claim on their policy. This led to us to review if medical providers impose a time limit to their claims. Many insurers have reported that although this clause is present in their wording, they do not enforce it at claims time, however our stance is that we have to rate based on the policy document.     

If you would like to have a read of the article, please click here

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Your feedback

We value getting your feedback on how these wordings are being applied to claims you may be aware of. Please email us with details of any recent claims to help us update our understanding.

Doreen Dutt, Research Manager, Quality Product Research Limited, researcher@qpresearch.co.nz


Legal and regulator update for the life and health insurance sector

4 April 2022 - Minister of Commerce and Consumer Affairs, Hon David Clark, January and February 2022 diary released with the following potential financial services sector related meetings noted:

  • 2 Feb 2022 – ASB (Vittoria Short, CEO; Craig Sims, Executive GM; Debbie Mills, Tribe Lead Home Ownership & Louise Griffin GM Govt Relations)
  • 2 Feb 2022 – Kiwibank (Steve Jurkovich, CEO; Liz Knight (CRO); & Mike Hendriksen (CLO))
  • 2 Feb 2022 – BNZ (Dan Huggins, CEO; Sam Perkins, Chief Risk Officer; Martin Elliott, GM Consumer Product Lending Domain; Dean Schmidt, Exec, Commercial Services and Responsible Business; Paul Hay, GM, Regulatory Affairs; Dirk McLeish, GM, Line 1 Control and Assurance)
  • 2 Feb 2022 – Westpac (Catherine McGrath, CEO, Westpac; Clayton Cosgrove)
  • 2 Feb 2022 – ANZ (Antonia Watson, CEO; Peter Parussini, GM Public, Consumer and Govt Affairs; Ben Kelleher – MD, Personal Banking; Cushla Scholfield,  Associate General Counsel; Andrew Gaukrodger  - Govt Relations & Corporate Responsibility)
  • 9 Feb 2022 – IAG (Bryce Davies, Corp Relations and Amanda Whiting, CEO)
  • 9 Feb 2022 – Financial Advice NZ (Heather Roy, Chair and Katrina Shanks, CEO, and John Bolton, Director)
  • 10 Feb 2022 – FinCap (Ruth Smithers, CE)
  • 17 Feb 2022 – Speech to FSC Future Ready Advice Summit

https://www.beehive.govt.nz/minister/hon-dr-david-clark

4 April 2022 – Government announced a new round of sanctions announced targeting Russian oligarchs. https://www.beehive.govt.nz/release/new-round-sanctions-announced-targeting-russian-oligarchs

5 April 2022 – Parliament completed the first reading of the Fair Pay Agreements Bill, referred to the Education and Workforce Select Committee with report back due by 5 Oct 2022.

https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_121328/fair-pay-agreements-bill

https://www.beehive.govt.nz/release/everyday-workers-take-centre-stage-fpas-bill-passes-first-reading

6 April 2022 – IRD advised that a new FATCA Excel file template is now available for download via myIR.

6 April 2022 – Commission for Financial Capability released data about KiwiSaver balances across age groups and gender, with the data collected by Melville Jessup Weaver actuaries on behalf of the Commission. https://retirement.govt.nz/news/latest-news/new-data-reveals-for-the-first-time-largest-breakdown-of-kiwisaver-balances-across-all-ages-and-genders/

6 April 2022 – Privacy Commissioner invited submissions on a proposal to amend the Health Information Privacy Code 2020 to align it to the Pae Ora (Healthy Futures) Bill, with submissions closing on 4 May 2022. https://privacy.org.nz/publications/statements-media-releases/submissions-invited-on-proposal-to-amend-the-health-information-privacy-code-2020-to-align-it-to-the-pae-ora-healthy-futures-bill/


nib on Kiwi insurance acquisition, and more daily news

nib NZ CEO Rob Hennin has shared insight into the decision for nib to acquire Kiwi Insurance. Hennin has said the transition reflects nib’s goal of providing greater access to personalised health risk assessment, treatment and care for members. Hennin has said that the move will also offer members a wide range of services to better align with the insurer’s purpose of supporting New Zealanders bettering their health.

“For a total consideration of around $45 million, nib New Zealand is snapping up the whole of life insurance business Kiwi Insurance, and here nib NZ chief executive Rob Hennin (pictured) talks about the “real opportunity” for the health insurer.

“Expanding into life and living insurance is a great reflection of nib’s payer-to-partner (P2P) transformation where we seek to provide greater access to personalised treatment and care for our members as we move away from being a traditional payer of claims and towards our ambition of becoming a true health partner,” Hennin told Insurance Business.

“It will allow us to provide greater value to our members by giving them access to a suite of health, life, and living covers in line with our purpose of ‘your better health’.”

The New Zealand CEO also echoed group boss Mark Fitzgibbon’s sentiment that, through the swoop, more people will benefit from the investment being made by nib in more personalised health risk assessment and management.

The transaction, which is expected to cross the finish line early next year, will see nib NZ offer Kiwi Insurance’s life and living insurance products and services alongside the upcoming new owner’s health insurance proposition.

“Life and living insurance reflects our purpose of supporting Kiwis’ better health,” said Hennin. “It’s also a great opportunity for members to bundle their health, life, and living products in a complementary way.

“We’ll be offering the same great customer service, support, and value-for-money products in the life and living insurance space as we already do for health insurance.”

According to seller Kiwi Group Holdings, which is also the name behind Kiwibank, customers’ existing insurance policies will continue under their current terms and conditions. The pertinent claims processes also remain unchanged, in that those making a claim will be able to do so as usual.

Additionally, the Kiwi Insurance team will still be accessible via the same channels and contact details.

Hennin, similarly, offered assurances that no action will need to be taken by Kiwi Insurance policyholders. He said all current benefits will be honoured and that nib NZ is committed to providing a seamless transition, which is expected to take a period of 12 months.” Click here to read more  

In other news:

ASB: Just 30 seconds for broker to save a bank customer 30 per cent on his ASB insurance

Financial Advice: Financial Advice NZ gets new chair


Is an optimism bias the reason people fail to plan?

Is optimism the reason that people fail to plan? Or is it because we haven't shared what we know with them? Some recent commentary around research ASB Bank has done suggests that as a reason why about 40% of adults in New Zealand have less than $1,000 available for an emergency. 

Most people in the financial services sector make plans. We are used to developing budgets, running projects, setting goals, and seeking the information necessary to achieve them - and then taking action. It is somewhat comfortable to believe that the reason people do not do what we do is because they have some fundamental difference, such as optimism bias. The problem is that this relieves us of responsibility to act - 'nothing to do here, it's just how the world is' - which is deeply unhelpful if we really want to shift the dial and help people. 

Of course, it would be nice if there were some great academic research to evidence whether the relevant obstacle is optimism, indifference, ignorance, or some other factor. I have seen good research around planning which indicates high discounting rates are implied by the approach individuals take to future planning. 

In addition to that, I know that once a client sees a financial adviser, they tend to take different actions. That should give us cause for optimism. If the problem is something we can change, then we can focus on providing the circumstances that make change possible. Maybe that means that the optimism bias is changeable under specific circumstances - or maybe it means that it is simply a lack of knowledge that stands in the way of better plans.

It is easy to assume that people know what we do - especially if we live similar lives. Superficial things such as cars, clothes, and our casual social interactions seem to suggest we have much in common. Occasionally we get insights, the gag that fails, the conversation where you realise someone has such a very different life to your own, they have had different experiences and have received different information. Most advisers can relate stories about the reaction of clients to all sorts of facts that we treat as common sense, such as: that disability is much more common than early death and usually caused by illness not by injury. 

Optimism bias may have some explanatory power in the overall mix, but I am encouraged by the experience of advisers that a simple lack of knowledge has a big role to play in this problem. When people know better, they tend to do better. I want to help them to learn.


From Rob Stock: a thought provoking article on the value of advice

Rob Stock has a great piece on the value of advice. Do check out the full article at the link here, but I have also pulled out some quotes that illustrate the differentiation available within advice contexts. 

"Within 30 seconds an independent insurance adviser identified Dion Knill​ how to trim 30​ per cent off his life insurance premiums without reducing his cover."

This is a tough one - after all, advice isn't all about price, but the willingness to do a comparison tends to be a hall mark of a full service adviser, and acts as a major proof point for the client. They are impressed when advisers are happy to engage in the pros and cons of different solutions, and, as the article progresses, you can see that the discussion broadens out later on. Many banks do not give their staff the ability to produce fast comparisons - fearing that comparison invites switching. It doesn't need to, that's kind of the first use case, but overwhelmingly it is really about demonstrating that you are conversant with the market. 

Much of the savings turn out to be in the form of discounts and benefits from an additional service. I feel that proves my point about comparison. This adviser was creatively repackaging a basic life insurance contract with a wellbeing service. The client obviously got on board with that because they achieved some goals and got some extra rewards: 

"The savings came from applying a multi-policy discount, which he had not been getting, and by joining the Vitality health scheme run by AIA, which bought Sovereign from ASB's parent company in 2017 in a $4.15 billion deal, and took over its policies.

“In the last 87 days I have received about $100 in Airpoints, and 15 per cent off my insurance premiums (through the Vitality scheme), and I will keep saving money based on my fitness levels. None of this stuff has been pointed out to me over the last three or four years,” Knill said."

I can appreciate why ASB did not offer the service - many full-service advisers also choose not to offer AIA Vitality - but different advisers are welcome to package their services in different ways. That can have a big impact, especially on smaller policies, which are more common in a bancassurance context. In this case it wasn't a simple price comparison plus switch. In fact, it seems like there was probably no switch at all, but the addition of some services, and a powerful brand story about the value of full service advice.

I felt it also underlined a consequence of the place that legislators have drawn the line between no-advice and advice. Many bank services are categorised as advice within the meaning of the law, but there can still be a large difference between the advice offered by a full-service adviser and a low-service one. That's something that Cecilia Farrow talks about in her comments near the end of the article. It is a place where independent advisers can really exploit their advantages: being agile, access to a wider range of tools and services, and creating new packages of value for clients on a truly individual basis. Instead of grumbling about the advantages that the 'big end of town' have, some small advice businesses appear to revel in the joys of asymmetrical competition. 

Grateful thanks to the adviser who drew this article to my attention. 

 


nib publish findings of parenting survey, and more daily news

nib has published the findings of the nib State of the Nation Parenting Survey that they conducted in partnership with One Picture. 1,200 parents from around New Zealand were surveyed. There are three key themes, the links between screen time and mental health, positive shifts from the pandemic, and greater awareness on health needed.

Key points from the survey include:

  • Use of technology and screen time ranked as the top parenting concern again
  • 77% of respondents expressed mental health concerns
  • Screen time, social media and gaming reported as the top three addictive activities
  • 63% of respondents believed their child couldn’t live without their devices
  • Sleep, diet and exercise, and behavioural issues are top three health-related concerns
  • 57% of respondents noted their appreciation for their family’s good health and time spent together increased in the last 12 months
  • Over 50% of respondents said they have had help from family and friends while daycare and school were closed
  • 38% of respondents highlighted that balancing work and parenting was the number one source of household stress
  • Over one in three parents prioritise their child’s health over their own
  • 73% of respondents knew or had a record of all the vaccinations their children had and only 42% said they kept track of their own

Positive shifts from the pandemic

Despite health-related concerns increasing last year, this year’s survey findings highlighted that most Kiwi parents are feeling more optimistic now, with results having largely dropped back to 2019 (pre-pandemic) levels. Sleep, diet and exercise, and behavioural issues were cited as the top three health-related concerns.

For 57% of parents, appreciation for their family’s good health and time spent together increased in the last 12 months. Of those, more than half said both factors were a direct result of the pandemic, demonstrating some positive shifts for Kiwi families. 

While many families struggled without access to daycare centres and schools during changing alert levels, more than half of respondents identified having close family to lean on, with friends (28%) and extended family (24%) also being common sources of support.

Noting the art of balancing work and parenting as the number one source of household stress (cited by 38%), many Kiwi companies can also be commended for contributing towards the almost half of working parents (47%) that experienced an increase in flexible working arrangements in the last 12 months.

nib New Zealand CEO, Rob Hennin said, “While nobody celebrates the disruption and distress caused by the COVID-19 pandemic, it has provided greater opportunity for companies to rethink traditional work practices and explore what work, family and life really looks like to our people.

“One aspect of this has been ensuring parents feel supported in the workplace to put their whānau first. At nib, we encourage flexibility around when and where our people work, so they can make time for key moments like their child’s doctor’s appointment, home-schooling during the pandemic or their afternoon sporting activities. We support this by providing our employees with an annual NZ$1,260 work from home allowance, in recognition of the ongoing costs of remote work as well as free access to online GP consultations in partnership with Tend,” Mr Hennin added.

Greater awareness on health needed

As the topic of health and vaccinations continue to dominate headlines, the survey uncovered it’s an area where parents require more support. Over one in three parents prioritise their child’s health over their own (especially when it came to lower income and single parent households) suggesting that many are faced with making a choice between addressing their own health issues or their child’s.

Around half of respondents knew what health checks their children needed each year, with this dropping to 35% when it came to their own health checks. While 73% knew or had a record of all the vaccinations their children had, only 42% of parents said they kept track of their own.

“With 71% of children having experienced at least one negative mental, physical or behavioural issue in the last six months, we need to ensure Kiwi parents are feeling supported to deal with the health and wellbeing needs of their whānau,” Mr Hennin said.

“We aim to address some of the barriers faced by families when accessing health information through our various initiatives – such as our partnership with Nathan Wallis, providing free resources to help families through life, as well as wellness programmes which deliver plans to help improve health outcomes for our members.”

“We hope these annual insights spark conversations around parenting and health and encourage all generations to be more proactive when looking after their health and wellbeing,” Mr Hennin said.

nib partnered with One Picture to deliver the nib State of the Nation Parenting Survey, which surveyed a representative sample of 1,200 respondents from around the country.

Screenshot 2021-11-24 160540

In other news

ASB: More people using financial advisers: ASB

AIA: AIA NZ chief executive takes leave

Screenshot 2021-11-24 155659


Fidelity Life introduce new policy management system, and more daily news

Fidelity Life has announced the introduction of their new policy management system, Tahi. The launch is scheduled to roll out in phases beginning from 15 November and will be completely in place by February 2022. The first phase involves new business only, existing policies will gradually be transitioned from the current system.

Changes will include:

  • New digital customer product brochures
  • Combination of post and email correspondence
  • New reporting tools
  • Change to credit card process

From Monday 15 November we’ll be launching a new policy management system, called Tahi. It’ll be a phased launch, from mid-November 2021 through to February 2022, so there’ll be a couple of steps along the way.

There’s some great new functionality that will gradually be introduced but let’s start with the basics to get you going from day one. There’s a lot to take in so we’ll make this information available on Adviser Hub for your ongoing reference.

 

In other news

Cigna: Business Performance Manager role being advertised

nib: Sustainability Manager role being advertised

Wealthpoint: Wealthpoint appoints Independent Director

ASB: ASB data shows financial wellbeing improving but many 'just coping'

Accuro: Accuro celebrating 50th anniversary

Accuro 50th anniversary


Quality Product Research: Proposed rating for Peripheral Neuropathy

Introduction

Peripheral Neuropathy is a condition where the nerves that relay messages to and from the brain, spinal cord and body are damaged or diseased. Most commonly affecting diabetics but also caused by traumatic injuries or infections.

Please find our proposed rating for Peripheral neuropathy below.

Sub-items rating review

Peripheral neuro

Notes

Peripheral neuropathy has a low weighting in our Research database. Most insurers have the same stance towards this condition, with Asteron Life recently removing their drug and alcohol exclusion. While most insurers use the same assessment criteria to qualify for payment: 1) insured must have the inability to perform one or more Activities of Daily Living (ADLs) or 2) a 25% permanent whole person impairment, Asteron only has one of these (which according to our methodology is a difference). When we further investigated how this definition might be applied to other insurers, it became clear that practically, access to a qualified medical practitioner who can perform an assessment, diagnosing permanent impairment may be a challenge for clients outside our larger cities. ACC also uses this permanent impairment criteria for lump sum claims, however very little information can be found elsewhere. Overall, existing data does suggest that claims for this condition are quite low, so we conclude that the definition for all insurers is functionally similar in this case.

Your feedback

We value getting your feedback on how these wordings are being applied to claims you may be aware of. Please email us with details of any recent claims to help us update our understanding.

Doreen Dutt, Research Analyst, Quality Product Research Limited, researcher@qpresearch.co.nz


Quality Product Research: Proposed rating for Aplastic Anaemia

Introduction

Were back with another item analysis - this time for Aplastic Anaemia.

Please find our proposed sub-items below.

Sub-items rating review

Aplastic

Notes

A defined treatment option is a commonality across all insurers, excluding Asteron Life who have a more open definition when compared to their competitors. We have included a sub-item for those insurers who require diagnosis from a medical specialist along with a deduction to those that do not offer an additional treatment option. Aplastic Anaemia is a lowly weighted item in our database; however, our proposed rating aims to emphasise the difference in the definition between insurers, rather than focusing too much on ranking them from best and worse.  

Your feedback

We value getting your feedback on how these wordings are being applied to claims you may be aware of. Please email us with details of any recent claims to help us update our understanding.

Doreen Dutt, Research Analyst, Quality Product Research Limited, researcher@qpresearch.co.nz


Quality Product Research: Proposed rating for Financial Planning & Legal Advice

Introduction

We have recently conducted a full review on our “Financial Planning & Legal Advice” item. Please find the new sub-items below.

Proposed sub-items

FInancial final

Notes

The Financial Planning & Legal Advice benefit differs between insurers with a significant weighting on whether the company offers reimbursement on legal expenses. Fidelity is one of the major insurers who doesn’t offer this, and customers are only eligible for payment if their Life cover sum insured is over $100,000. Similarly, Momentum Life requires 3 years continuous cover before payment eligibility.

Another item worth mentioning is Asteron, Fidelity and Westpac directly stating that the benefit will be paid out to all policy owners – the maximum amount paid by most insurers is $2,500 so this particularly feature seems to reduce the value of the benefit.  

Your feedback

We value getting your feedback on how these wordings are being applied to claims you may be aware of. Please email us with details of any recent claims to help us update our understanding.

Doreen Dutt, Research Analyst, Quality Product Research Limited, researcher@qpresearch.co.nz