Quality Product Research: (Inbuilt) Child Trauma – Part Two 

A reader has queried whether QPR takes the sum insured into account in our Research Ratings.  And the answer is yes, we do consider the amount paid by each insurer. In fact amount paid are a vital part of a value-based assessment approach - and something we capture much better than simple feature lists of benefits do. 

In trauma insurance, some companies pay the full benefit for an item, others only make a payment of 10% or 20% of the sum insured because the condition was not severe enough to warrant a full payment. Our score is varied according to how much would actually be paid. In the scenario for Child Trauma, we have a claims amount of $100,000 and calculate how much would be paid out by each insurer.  

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Furthermore, based on adviser feedback we have corrected our ratings to reflect the fact that Asteron does include the option to convert their child cover to adult trauma at age 21. Interestingly, if the parent is on Trauma Recovery (TR) and considering converting their child cover to TR with Early Trauma they are required to complete an application. 

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


Life price comparison database update

We have updated the life price comparison database, version 113, to reflect the changes to Cigna's pricing, which were extensive. Corporate subscribers should examine the update notes that have been sent with the database and the change report function. Advisers should check out comparisons on Quotemonster to see the effect of the changes which involved some increases - but also some notable decreases - which tended to favour larger cover amounts and the 90 day wait period for IP / MP. 


Quality Product Research: Proposed rating for Benign Brain and Spine Tumour

Introduction

The World Health Organisation states that 130 different types of brain tumours exist. A benign brain tumour is a non-cancerous growth in a distinct area of the brain. The survival rates for patients with benign brain tumours are higher than others, however this depends on the size and location of the tumour within the brain.

Proposed sub-items

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Notes

There are some noticeable differences between insurers such as whether partials exist, or if the spinal cord or tumour on the pituitary gland is covered. We have tried to make the sub-items clearly demonstrate the variation between insurers.

Why is this important?

Although QPRs weighting of this item is low, it would be of high interest to those that have a family history of brain cancers. With a lot of insurers now having specialised cancer products we would like to ensure that our rating is relevant. 

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


Cigna implements new commission, and more daily news

Cigna has implemented several new changes to their commission model. Advisers will now receive 100% of Cigna’s documented commission rates, regardless of their persistency rates or group affiliation. With this change, advisers will now have the power to decide how commissions are split. Commission payments will now begin from month two. Cigna has said this change was introduced in acknowledgement of the extra time and effort advisers are putting into their businesses. Another change is giving adviser the option of choosing the payment period with the as earned option. Advisers can now choose between upfront payment and spreading the payment over the first two years. Advisers that choose to spread payment over two years will ensure that there is no clawback if a policy lapses during that time. Cigna has added more selection to their discounting options. These options have been linked to spread commissions.

Renewal Commissions will now be paid from month two

We recognise that the servicing of your customers doesn’t start from month 13, it starts from the moment their policy is issued.

With the new regulatory environment you’re now operating in, we acknowledge the extra time and work you’ll be dedicating to your business. So we want to support you further as you work harder to protect your customers.

From now on you’ll be paid all the commission

All Advisers, regardless of persistency level and/or Group affiliation, will now receive 100% of our documented commission rates. We can help facilitate any splitting of commissions you need to do, but you are in total control of where it goes.

We’re introducing an ‘as earned’ payment option

Choice matters. So we’re giving you option to receive your commission payments over the first two years, instead of upfront. With this option there’s no clawback if a policy was to lapse in the first two years.

More flexibility with our discounting options

To provide you more flexibility and options to suit your customer’s needs, we’re adding more selections to our discounting options and we’ve linked these to our spread commissions.

Updating our commission to include best in market features reflects our ongoing commitment to you and helps ensure New Zealanders have continued access to the quality advice you provide.”

Cigna commission table April 16 2021 3
Cigna commission table April 16 2021 3
Cigna commission table April 16 2021 3

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Cigna: Insurance for living campaign 


Cigna set to implement number of new processes, and more daily news

Cigna is set to implement several changes, including a new commission structure, a new specific injury product, new eApp and online Adviser Hub, and new underwriting processes. The announcement was made during Cigna Live. During the livestream, David Haak, General Manager of Distribution, discussed the changes to commission by noting that advisers would no longer be paid on a 13 month basis, instead payments would commence from month two. Cigna will also offer an 'as earned' payment option that will allow advisers to spread out commission payments.

During the session Alison Manning, Head of Product, announced that a new specific injury product would be introduced. The product will focus on offering financial support to customers that suffer injuries such as fractures or burns. Unlike other products, this product will offer cover up to $5,000 for single injuries and more for multiple injuries, regardless of age and smoker status. Cigna will not consider any offsets due to ACC payments. Payment will be a lump sum and will provide cover for surgery after an accident. Customers will be able to include this product as an add-on to other policies.

Chris Hand, North Island Regional Manager, noted that Cigna has been developing a new eApp and online Adviser Hub for the past 12 months. Hand said that the new hub is intended to offer advisers and customers more data security. The new hub is also set to streamline the quoting and application process.

Similarly, Cigna is set to improve underwriting processes. Chief Operating Officer Debbie Eyre highlighted that the new underwriting approach will ensure disclosure processes are made easier. This change includes shorter questions to increase completion rates. Cigna plans to have a single simplified underwriting process for all products. 

“Cigna's top brass made the announcements during a live webcast to more than 1200 advisers and industry commentators this morning.

General manager of distribution, David Haak gave some information about Cigna's new commission structure but did not cover specific rates as that information would be sent to advisers at a later date.

However, Haak did say the new commission structure would be simplified and tailored to individual advisers.

He says renewal commissions will be paid from month two, instead of month 13 and 100% of documented commissions would be paid out.

We understand this to mean that commissions are paid to the financial advice provider, who may pay them on to dealer groups or service providers. The payment of renewal commission from month two has the effect of increasing the commission paid in year one, but not at month one, clearly. 

"There will also be an 'as earned' payment option where you can spread out commissions over a longer period, instead of a lump sum."

Cigna head of product, Alison Manning also announced a new specific injury product that would provide more financial support for injuries like fractures or burns.

Manning says cover is not determined by age or smoker status and would provide up to $5000 of cover and a higher payment for multiple limb fractures.

It will also cover second and third-degree burn cover and can be used as an add-on to any other policy.

Accidental injury cover is a valuable addition to the product range - there are now three insurers offering similar products, so we shall be adding the rating to research subscribers (available at quotemonster.co.nz). 

She says the new product was called for by advisers and "Cigna had listened and tailored the product on feedback from the industry".

Cigna's specific injury cover will not take into account any offsets due to ACC payments, will be paid out as a lump sum and will also provide cover for surgery after an accident.

Cigna's North Island regional manager Chris Hand gave a brief overview of the company's brand new eApp and online Adviser Hub that has been developed over the past 12 months.

He says the new hub will provide more data security for advisers and their clients as well as streamlining the quoting and application process allowing advisers to send questions to clients directly before any face to face meetings.

"In many cases, this will lead to instant cover and allow advisers to amend quotes on the fly."

Cigna's chief operating officer Debbie Eyre commented on the company's new underwriting approach that she says will make the disclosure process easier and clearer for its customers.

This will involve a new, shorter set of questions designed to increase disclosure rates and "maximise completions at point of sale".

"Regardless of the level of cover...there will be just one ruleset and one questions set...and will apply to almost all of our products - income protection, mortgage cover, trauma, life cover and waiver of premiums.

"This will mean our underwriting team are freed up to talk to you about more complex cases." Click here to read more

In other news

From Good returns: From army life to life insurance - a big gun leaves the industry

Quotemonster: QuoteMonster appoints new general manager


Cigna maintains AM Best financial rating, and more daily news

Cigna New Zealand has maintained a Financial Strength Rating of A and a Long-Term Issuer Credit Rating of A. Mark Schollum, Cigna Chief Financial Officer, has commented on the results saying that Cigna is pleased that the ratings haven’t changed. Schollum continued by saying that the unchanged rating is an indication of Cigna’s financial standing, business sustainability and strong global backing. Schollum has also noted that Cigna’s confidence should reassure financial advisers and customers during this climate. AM Best has highlighted that Cigna’s financial and operating performance, neutral business profile and appropriate ERM all contributed to the rating assessment.

“Cigna's Financial Strength Rating of A (Excellent) and Long-Term Issuer Credit Rating of “a” with stable outlooks, remains unchanged from last year's assessment.

Cigna New Zealand chief financial officer Mark Schollum says Cigna is pleased the rating has remained unchanged.

“This is confirmation of Cigna’s strong balance sheet, the underlying long-term sustainability of our business and our strong global backing,” Schollum says.

“At Cigna, we’re committed to being here for our customers not only now but in the long-term. Having this continued confidence in our business should be reassuring to our advisers and customers in these uncertain times.”

AM Best is a United States-based global credit rating agency, news publisher and data analytics provider specializing in the insurance industry.

In its rating report, AM Best states, "Cigna has strong earnings and dividends from the group’s insurance entities".

"These have helped bolster holding company metrics, such as interest coverage and reduction of outstanding debt...and Cigna’s insurance subsidiaries have consistently provided cash flow upstream in the form of dividends, which have been growing each of the past two years, given favourable operating results.

"Cigna Life & Health Group reported strong earnings again in 2020, supported by lower utilization in the face of the Covid-19 pandemic, with the organization also consistently reporting strong double-digit profitability ratios," the report states.

AM Best goes on to say the ratings of Cigna Life Insurance New Zealand Limited (CLINZ) "reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM.

"Furthermore, the ratings of CLINZ factor in rating enhancement from the Cigna group. This reflects integration and ownership from Cigna group and AM Best’s expectation that the group would provide capital support if required.”

“CLINZ ranks among the largest life insurance companies in New Zealand, benefiting from a multichannel distribution approach. While the company accounts for a small component of the Cigna group’s consolidated revenues and earnings, it is viewed as significant to the group’s operations in the Asia-Pacific region." Click here to read more

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nib on Pharmac review, and more daily news

Dr. Graeme Jarvis has written a piece on Stuff about the Government’s plan to conduct a review into Pharmac. In the piece, Dr. Jarvis notes that the review should be seen as being for the good of the country, as long as the review is intended to update an outdated system, improve Pharmac’s performance, and expand access to publicly funded medicines. Transparency, timeliness and equity have been described as being the focus of the review. 

“That this Government has decided to have a review into Pharmac should be seen as positive by the country, and good public sector governance. This assumes, of course, that the review truly aims to look at ways to modernise a 27-year-old system and both to improve the way New Zealand accesses publicly funded modern medicines and to enhance the agency’s performance.

Performance for any health service should not be about PR, such as modelled graphs reporting assumed, rather than actual, savings. It should be about health outcomes achieved. Hopefully, the review can lead to the generation of meaningful health outcome measurements for patients, not myth-based savings indicators.

Transparency, timeliness and equity seem to be key areas of focus in the review. Safety of medicines is not – that is rightly a statutory role for Medsafe, not Pharmac. However, given recent deaths following an enforced brand switch of an epilepsy drug, now subject to a coronial investigation, the safety of Pharmac’s cost-driven decision-making processes should be within scope.

Timeliness of decision-making is an issue. New Zealand takes 2.5 times as long as the OECD average of nine months to publicly fund modern medicines, all of which have undergone rigorous review internationally, including assessment of clinical need and effectiveness. Why the delay? Hopefully the review will answer this question.

Despite New Zealand’s comparable wealth on a GDP per capita basis, it funds between two and 10 times fewer modern medicines than our OECD peers. Why the disparity? Is it technical or fiscal rationing? Only the former is considered in-scope for the review.” Click here to read more

nib has noted that New Zealanders can take Pharmac out of the equation by signing up to Ultimate Health with Easy Overlay promotion. The campaign begun April 1 and will continue until 30 June 2021. The promotion is only being offered on nibAPPLY.

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Cigna: Cigna Live registration still open

 


Cigna Live announced, and more daily news

Cigna has announced that Cigna Live, a live streamed adviser update, will be broadcasted on 8 April 2021. In the live stream Cigna will discuss how the recent technology and product enhancements are intended to help transform adviser advice journeys. Cigna Live will be hosted by Jehan Casinader, Broadcast Reporter of the Year 2020. Gail Costa, senior Cigna staff and other experts will join to discuss recent enhancements and Cigna’s commitment and global positioning. The live stream will be 8 April from 10am to 11am. Those that register go into the draw to win a $1,000 business development pack. Cigna has also announced that it is planning on launching a new initiative that has been described as a market-first. Click here to register

I’m excited to formally invite you to Cigna Live – our first ever live streamed Adviser update.

By tuning in on 8 April, you’ll learn more about how our latest technology and product enhancements will help to transform the advice journey for you and your customers and make it even easier to do business with Cigna.

We’re also excited to be launching a market-first initiative that we think will be a game-changer for the Adviser community.

Jehan Casinader, Broadcast Reporter of the Year 2020, will host the event and you’ll hear from myself and key subject matter experts from across the business, who will share more about the work we’ve been doing to improve your experience with Cigna.

Alongside my local team, Jason Sadler - Cigna’s Head of International Markets, will provide an update on the company’s global position and ongoing commitment to protecting New Zealanders in 2021 and beyond.

In other news

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Financial Advice: Economic Series webinar set run between 31 March and 21 April

FMA: FMA chief executive resigns


FMA warns new regime concerns all advisers, and more daily news

The FMA has said that the new regime is intended for all advisers, including advisers are no longer looking for new clients. Director of market engagement, John Botica, has clarified that all advisers will need to be fully licensed. The FMA has warned that they will be following up on adviser to ensure they are all licensed. If advisers aren’t, the FMA will take action. Botica has said the 90 day period is intended for paperwork.

“It is the final working day before the start of the new financial advice regime, and the FMA has warned that it will be following up every registered adviser to make sure everyone is operating under a license.

John Botica, director of market engagement at the FMA, said there had been some confusion in the months preceding the start of the regime, with some advisers believing they do not need a license - however, he said that every adviser will need to be fully licensed, regardless of whether or not they are taking on new clients.

“We will be tracking every authorised and registered adviser to follow their license status through on the FSPR,” he said.

“If you are operating outside of the law, we will take enforcement action.

“Come March 15, you must be operating under the new regime and you must either hold a license, or work for someone who has a license. The 90 days between March and June is simply the opportunity for you to do the paperwork.”” Click here to read more

In other news

Cigna: Life Insurance and Blended Families

FSCL: Title fight: FSCL vs Ombudsman drags on

Quashed: Kiwi insurance start-up attracts backing from Icehouse Ventures


Cigna premiums to increase, and more daily news

Cigna has announced that from 15 April 2021 there will be changes to underlying premium rates on Life, Trauma and Disability covers across Assurance Extra, Business Assurance, Business Extra and Agribusiness Extra. Changes to Life, Trauma and Disability cover are a response to feedback and market developments. The price changes represent the changes. The price changes will be applied for new customers but current customers will have the new rates applied on their next premium review date after 15 April 2021. Applications that are submitted  before 15 April 2021 and issued before 15 May 2021 will not be immediately affected by the price changes. All changes are listed below:

 

·     Life cover rates on Assurance Extra, Business Assurance, Business Extra and Agribusiness Extra are increasing by 3% for yearly renewable, 5-year level and 10-year level premium structures.

·     Alongside this we’ve increased our large sum assured discounts for customers with over $500,000 of life cover.

·    Trauma cover on Assurance Extra, Business Assurance, Business Extra and Agribusiness Extra are increasing by 3% for yearly renewable premium structures.

·    Accelerated Complete Disablement Cover on Assurance Extra, Business Assurance and Agribusiness Extra are increasing by 3% for yearly renewable premium structures.

·    Disability covers including Income Cover, Mortgage Repayment Cover and Premium Cover are increasing dependent on factors including age, gender, wait period and benefit period. The increase will generally vary between 1-10%, however in some cases customers will experience a decrease.

 

“We wanted to give you a heads up about upcoming increases to the underlying premium rates on our current Life, Trauma and Disability Cover pricing across Assurance Extra, Business Assurance, Business Extra and Agribusiness Extra.

 

The new underlying rates will come into effect on 15 April 2021.

 

Over the past year in response to feedback, and in line with market developments, we’ve made a number of enhancements to our core Life, Trauma and Disability cover to make it easier for customers to access support when the unexpected happens.

 

These new competitive rates reflect the recent enhancements and will contribute to the long-term sustainability of our products while remaining good value for your customers.

 

For new customers: The refreshed rates come into effect on 15 April 2021 for all new policies.

 

For existing customers: The new rates will be applied to existing customers at their next premium review date from 15 April 2021. Customers will receive notification of their new premiums via the renewal letter which is sent prior to their premium review.

 

Any applications submitted before 15 April 2021 and issued before 15 May 2021 will be honoured at the old rates and will not be subject to the new rates until the first premium review.” Click here to read more 

In other news

FMA: the FMA has issued a public warning to Roger David Gannon of Gannon Insurance

Cigna: Simon Prentice to join Cigna as Business Partnership Manager based in lower South Island

Cigna: Sharon Duffell new Christchurch Senior Underwriter in the New Business & Underwriting Team

Cigna: Multi-Benefit Discount extended until 30 June 2021