moneyblog

Recent product and price changes

Recent product changes include:

• New Product release Asteron for Trauma, Life and TPD
• New Policy document for Cigna for Life and Trauma
• Southern Cross product changes effective 1 December

Recent pricing changes include:

• Pinnacle Trauma rates effective 20/9/18
• BNZ Trauma rates went up August
• Fidelity Life rates effective 1/7/18
• Southern Cross announced pricing changes from 1 Novmber

Bank and Direct Price Comparison Survey Updated

Chatswood's Bank and direct price comparison survey has been updated and is available for purchase. Please contact me directly for more details of the changes since the last update was done in April 2017.

Product Mapping for Banks and Direct Insurers

Below is an outline of the banks and other direct providers with a map as to which benefits and options they offer.

If you are trying to do a product comparison on Quotemonster with any of the companies below and they are not appearing, chances are you are quoting a benefit or option they do not offer.

If you would like a PDF version of this table you can download it here:  Download Product Mapping - December 2017

BNZ upgrades trauma cover

BNZ Life has issued a policy addendum to its trauma policy, adding Benign Brain Tumour, Major Head Trauma, and Out of Hospital Cardiac Arrest, as well as updating a number of conditions and removing some exclusions

QPR Update V106

We have recently distributed the QPR database to subscribers and have also updated Quotemonster with the following changes:

• BNZ - Policy Amendment 1 Sept 2017 Life, TPD, Trauma and Income Protection
• Fidelity Life Policy Wording updates. No rating change
• Exclusion Definition review of all products

Trauma Product: BNZ LifeCare changes, but severe heart attack definition remains limited

BNZ made a number of changes to their LifeCare products on the 1st of September. Critical conditions such as benign brain tumour, major head trauma and out of hospital cardiac arrest have been added to their Critical Condition benefit. However, the severe heart attack definition remains tough by industry standards with a requirement to meet at least three of four defining factors or alternatively have a substantially ventricular ejection fraction. A couple of exclusions have also been removed from some benefits including an exclusion for war and one for HIV. Click here to read more.

Australia: Banks and their Insurance Businesses

 

Updated post: 

Although I have a convention of tagging news from Australia in the headline, this post has a great deal of relevance to our market, as it accounts for the fact that insurers representing nearly half of the market are for sale. The AFR has a detailed piece which I will make a few quotes from below, but you can find at this link, on why they think that banks owning insurance companies has become a headache - hence the rush to sell them. First, the AFR says that the news CommInsure was for sale was greeted with indifference by the market because of the 'state of the industry, which has been hammered by rising lapse rates and more lately, soaring claims'.

Obviously, the situation in Australia has been quite different for a number of insurers, to the experience of the same brands in New Zealand. Sovereign is not CommInsure, Asteron Life in New Zealand contributes well to Suncorp's group profit. Overall lapse rates and claims performance differ between the countries, in part, for structural reasons. We don't have a lot of TPD in superannuation, which appears to have caused some particular problems in Australia. 

The AFR went on to list the companies sold: NAB sold to Nippon Life, Macquarie to Zurich. Then to list those for sale - they name ANZ, the life businesses of Suncorp, and quote AMP as saying it is "open-minded" - although I always felt that's the proper attitude of any business, pretty much all the time. But because these businesses are often quite closely linked behind the scenes (systems, staff, brands, reinsurance, and more). Therefore, if the Australian business is sold, it is common that the New Zealand one goes with it. Not all businesses will be sold, of course. In addition, when a business is under review sometimes a bias towards a sale can uncover an opportunity to buy. But some transactions seem likely in the coming year. If the number was two, or three, it would represent an incredible period of change. 

AFR then contemplates the question - how did it come to this? You can check out their full article for details, but two issues they list are worth contrasting with the situation in New Zealand.

The first is the ASIC report that "found 37 per cent of advice on life insurance was in breach of the law and almost half failed when high upfront commissions were charged". I read that report and it has some problems, small sample sizes, and arguable definitions of what constitutes 'failing' advice. But here in New Zealand we have an advice law which barely even makes the comparison possible. Since a written record of advice is not explicitly required under our current law it may not be possible to conduct the same kind of investigation here. But the FMA has gamely tried, and by analysing five years of data they have found a strong statistical link between incentive travel offered by insurers and higher new business and lapse rates. The insurer's might say, 'well that's what we were hoping for when we offered the incentive' but that brings us back to the quality of advice.

The second is the issue of poor systems - some so poor, AFR says, that they cannot provide good information, or hamper the ability of the insurer to report, or provide effective claims service. That sounds familiar too - and some of the systems will be common across the two markets. Replacing those systems requires new capital. So even after a transaction, that will not be the end to the change in the market. It will be the beginning. 

 

QPR Database Update

There have been a number of updates done in the QPR database recently (QPRV104) and subscribers now have access to these changes which include:

• ANZ new policy wording added for Life.
• BNZ new policy wording added for Life, TPD, IP, and Trauma. Main change to heart attack definition for Trauma.
• AIA new policy wording added for Life, Trauma and TPD.
• AIA Business Life and Business Trauma Standalone reviewed (Accelerated is still under review)

Research on Quotemonster also reflects the changes with are applicable.

BNZ Home Loans - A Case Study in the Value of the Adviser Channel

It is interesting to see how BNZ has re-entered the financial adviser market for the distribution of home loans and how quickly it now accounts for 40% of the home loans they issue. That has reversed the gradual slide in BNZ market share. It is also contributing evidence to conjectures on the strength of the advised channel:

• Advisers are able to handle complexity quite well, which helps consumers worried by increasingly complex rules in the home loan area. Those rules keep changing too, as the Reserve Bank struggles with ways to rein in a hot residential property market while keeping interest rates low. 
  
  
• Third-party advisers represent a quick way to reach a lot of customers. While they can be expensive in a variable cost basis they are cheap in a capital cost basis. The added distribution must add up to the equivalent of a lot of branches that would have had to be equipped and staffed before a single loan could be sold. 

Of course, regular readers will know that we don't see this as advisers versus direct. Increasing complexity and the attractions of variable cost channels are forces unlikely to change, so the adviser channel is likely to remain important. We see this as a necessarily multi-channel world. Keep the branches, keep your online sites, develop more, and keep distributing through advisers too, because quite a lot of consumers like advice. 

Upgrade Policy Wording

Here is a list of when the upgrade benefit come into effect for each insurer.