Insurers encouraging advisers operating remotely

Most of the people I know have had a very busy few days - apart from those that were already in self-isolation. The small business buyer wasn't at Pak N Save - they were at PB Tech. Not everyone is at the same place in their journey of digital transformation, and this week is a rough one for those that have more manual processes. For them, as for all of us, digital provides a welcome slice of good news.

Start with your basic hardware set-up (a reasonable laptop or desktop computer, a decent internet connection, microphone, camera, good chair, a good room in which to set it all up). Perhaps you already had an extensive home rig - and you just had to plonk the work laptop down on the desk. But maybe you've been busy with family and the pieces are in boxes taken from work over the last few days. You might want to check out some of the shots of home set-ups that people are sharing online to get some ideas. Here are two great links:

I particularly like the ones that show innovation, with things like computers squeezed into odd spaces, some DIY to get desks and screens that work well, and so on. The hardware, the physical office set-up in space is just the tip of the iceberg, however. It's the software, the tools, the process and the attitude you bring that makes the difference. 

Here digital has some great news for you - even if your software set-up is minimal, it doesn't matter. Digital can be adopted and improved well during your isolation - services can be set-up, signed up, and learned purely online. If you haven't done this before, you can get help online. Your tech support people will be delighted to help you - remotely, of course. Insurers have already got a wide range of online tools covering quoting, needs analysis, application, and underwriting. Quotemonster is operating - usage is up about 20% - so you can do needs analysis and write SOAs. 

There are also lots of online resources and a blizzard of emails from insurers about how cover works (normally for existing clients), how underwriting will work during this period (some restrictions on available product and some additional underwriting rules and processes), and how claims and administration work with most teams operating from home (its a bit slower, and call volumes are higher).

If you can offer a reassuring message to clients, I expect it will be gratefully received. If you can reach out to prospects and the wider community, some will doubtless respond. 


Partners Life and Cigna offer claims reassurance

As most people cancel their life and trauma insurance before retiring, the majority of life and trauma policyholders are younger and more likely to survive COVID-19. For this reason, life insurers are not expecting an increase in claims as a result of COVID-19. In this article both Partners Life and Cigna confirm that they have pandemic insurance in place, but also remind customers that they have relatively low levels of insurance on those that are most likely to be affected. Click here to read more :

"From a claims point of view, we don't believe it will come across in our claims experience on the types of products we sell," said Naomi Ballantyne, founder and managing director of Partners Life.

Most people cancelled their life and trauma insurance long before they retired, meaning most policyholders were younger, and had a very high likelihood of surviving a Covid-19 should they be infected.

I expect all New Zealand life and health insurers are in good shape to meet all claims.

Chatswood Operations - Running Remotely

I am glad to confirm that we have now completed the shift to remote working for the Chatswood team. Of course, for several of our team (Rob, Shaun, Wanyi) this is the usual mode of operation. For Fran, Kelly, Jerusalem, and me, we are now well set up to help you. Feel free to call, email, or schedule online meetings with the same freedom that you would have done before. 

At this difficult time I would like to wish you all well, personally, as you seek to reassure co-workers, staff, clients, and perhaps your friends, or children, that we will emerge from this current crisis at some stage. Now is the time to get on with what needs to be done. A great antidote to worry is work. 

Deep dive into client base valuations - and a comment on risk

We worked alongside Kurt Owen of Base to offer advisers insight into the factors considered when determining the value of an adviser’s client base and overall business. Click here to understand what does into an accountant’s valuation of a client base with input from a life insurance expert.

Please bear in mind that this is a framework presentation and the material in the presentation is illustrative only. The market has received some substantial shocks, and with new draft conduct law on the horizon, which appears to establish a framework that could ban commission, there are substantial risks in the medium term outlook. 

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Work is a great focus

Take all necessary precautions, and follow health advisory. Then get back to work. That's not a selfish message - as much as possible it is important that people can keep as much econmic activity going during this tough period. Although I am very busy, that's not the case for people who have been laid off. We don't want to make this worse than it has to be. Seth Godin expresses this particularly well in his post on the benefits of work during the current COVID-19 - it is a great way to do something positive, to focus on growth, to place your thinking on a practical and optimistic track. Check it out at this link: 

Asteron Life: Coronavirus

Asteron Life have announced that they have been closely monitoring the coronavirus 2019-nCoV outbreak. Based on this they have requested more information for any new and existing applicants regarding any travel to or from mainland China since 1 December 2019. Stating 'Our underwriters will be reviewing these applications on a case by case basis and, once the timeframe has been established, will be liaising with the adviser on any necessary disclosure updates'.

Asteron Life will also be updating AsteronConnect to include the following question: “Since December 2019, have you or anyone you reside with travelled to, from or through (i.e. transit stop) China or, have you been in contact with anyone who has been diagnosed with the coronavirus?"

Three draft laws affecting financial services progressing through the house...

Parliament recommenced this week with first reading being completed on 12 Feb for three Bills relevant to the financial services sector:

  • Financial Markets (Conduct of Institutions) Amendment Bill completed first reading, referred to the Finance and Expenditure Committee with report back due by 23 June 2020. (see more details in the blog post below).
  • Fair Trading Amendment Bill read for the first time, referred to the Economic Development, Science and Innovation Committee with report back due by 12 August 2020.
  • Financial Market Infrastructures Bill read a first time, referred to the Finance and Expenditure Committee with report back due by 12 August 2020.

Dates for closure of submissions on each are yet to be announced, but the likelihood of enactment before the election can potentially be gauged from the report back dates.

Consultation on the legislation being proposed for insurance contract changes is expected later this year.

My compliance guru, Rob Dowler, advises me that he has completed drafting his submission on the Conduct Bill some time ago while awaiting the call for submissions. He advises that his key submission points will be:

  • Why is a “conduct licence” being introduced rather than simply legislating requiring compliance with the proposed conduct requirements?
  • Why restrict the application of the legislation to licensed banks, insurers and non-bank finance companies? Why not capture all financial service providers? In fact, why not capture all commercial enterprises?

Good points. I know that quite a few industries share some of the information asymmetry that makes financial services a sector where the utmost good faith needs to be shown when dealing with customers: many technology companies offer similarly intangible services that have a lot of hidden complexity and are not fully understood by consumers. 

It's complicated... it nearly always is

Financial services is a complicated sector, and many simple things are trickier, on closer inspection, than they first appear. Novice consumer advocates are often surprised to find that short-form insurance costs more than fully underwritten cover. Consumers astonished to find that much 'direct' insurance is more expensive than the stuff where commission is paid. Others are amazed that the industry is allowed to discriminate - just the kind that we call it underwriting, enabling us to price different risks appropriately.

I could go on and on.

I try to remember that I won't know everything relevant, that my one insight into a problem might be a useful starting point, but is unlikely to capture everything about a situation - because it's complicated. A value chain rarely responds exactly as we expect. 

(Prompted by the articles on commission and the rise in the number of articles which proffer advisers as 'the solution' - whether it is the low interest rate environment, the large number of people without a Will, or even, just without insurance.)

US: methods to ensure adviser business feasibility

Zoe Garcia-Amaya has stated in her white paper that digitisation and automation will present advisers with new growth opportunities and will drive industry change. Garcia-Amaya elaborates that advisers will need to offer personalised services, digitise their value chain as well as ensuring that clients clearly understand the adviser’s value proposition to ensure continuous success. Click here to read more

The emphasis added is mine. Advisers often think of insurers offering these services, and assume competition with their core offer. But why shouldn't you offer a digital advice service?