Obesity and the burden of non-communicable diseases

A recent study of the cost of excess weight in New Zealand finds that the extent of obesity here costs us about $2b a year: The cost of excess weight in NZ | Newsroom It is well worth a read. Obesity is a known driver for a variety of non-communicable diseases such as heart disease, stroke, and cancer. The disease burden is large and the costs - both direct and in-direct were always going to be large too. To put that $2bn into perspective, it is about 8% of the total health budget. Cutting this figure would substantially reduce the number of early deaths we experience - by hundreds each year. 

We should be interested in how to get from here to there. Our obesity rate at just over 30% is not so far behind the USA at 36% and is significantly larger than the UK's at about 27%. Our goal should be to get down to a level more in line with, say, France, at just over 20%. Given the estimated costs of obesity, that drop could save us $700m a year. It would extend the lives of hundreds of thousands of people, improving, in turn, the lives of their families and communities. 

But we cannot win this prize by blaming or shaming people who are obese. It does no good. It also fails to address the context of the problem. I spent a substantial part of my life being overweight - people that dared point it out got the cold shoulder. In the end, I decided to change, but it takes a lot of effort to push against the dominant context which is that eating and drinking too many calories is normal. More than anything else that affects our behaviour, it is what people around us do that matters most. That is a complicated project which may take decades. 


More insurers share views on COVID-19 data and vaccinations, and more daily news

Head of Asteron Life, Grant Hill has announced that Asteron Life and its reinsurers have decided to monitor the long-term effects of COVID-19. Hill noted that they still need more data to ensure they implement effect underwriting processes.  

Similar to Asteron Life, AIA has said that they will monitor the situation, although acting CEO Sharron Botica has noted that new customers are not currently required to disclose whether they have had a vaccination against COVID-19. Botica has said that the underwriting approach will not change without new evidence.

Simon Tohill , General Manager of Strategy and Marketing has said that it is too early to understand the implications of the Government’s decision to transition from the elimination strategy to living with Covid-19.

Chief Insurance Officer Kath Johnson has said that Fidelity Life has decided treat existing unvaccinated and vaccinated customers equally. New customers will not be asked about their vaccination status and financial hardship support will continue to be offered.

“Head of Asteron Life Grant Willis says Asteron and its reinsurers are closely monitoring the medical developments around Covid-19 and its long term impacts.

"At this stage, we need more data to inform any decisions on how we underwrite for it in future.

"Kiwis tend to be under-insured when it comes to life and income protection type covers, and we think it’s important that New Zealanders know that there are still options for them when it comes to personal insurance, even if they have suffered from Covid-19 or other major health issues.

"Covid-19 has created a lot of uncertainty and hardship for many New Zealanders, and we have worked hard to ensure that our customers can keep and feel confident in the insurance they have purchased from Asteron Life."

Willis says Asteron has not applied any blanket exclusions for Covid-19 and have offered a range of support options to help customers keep their insurance cover in place through short-term periods of financial vulnerability.

AIA NZ acting chief executive Sharron Botica says AIA does not ask new customers to disclose their Covid-19 vaccination status as part of its underwriting process.

"We continue to monitor the developing situation, but at this time there is no new information that would cause us to change our current underwriting approach," she says.

General manager of strategy and marketing for Cigna New Zealand, Simon Tohill says it's also too early for them to "...fully assess the impact of the Government’s recent change in strategy from elimination to living with Covid-19.

Fidelity Life's chief insurance officer Kath Johnson says as a customer-led business Fidelity aims to give its customers certainty in an uncertain world.

"We currently have no plans to treat existing unvaccinated customers any differently to vaccinated customers and we don’t currently ask new customers if they are vaccinated.

"We continue to provide financial hardship support to our customers who need it, including as a result of Covid-19.

“In relation to potential underwriting changes in the future, we’ll make any decisions based on facts. Together with our reinsurers, partners and our industry body the Financial Services Council, we’ll keep monitoring medical developments closely, including the long term impacts of Covid-19.” Click here to read more

In other news

From The Spinoff: For many New Zealanders, Covid-19 will be a lifelong disease

FMA: FMA clarifies Wisdom House FAP cancellation decision

Strategi: Training opportunity with Strategi’s AML/CFT expert


The cost of care

It is hard to measure the true cost of an event like a cancer diagnosis. But insurers in Australia have done some excellent work on assessing the cost of care, at least, for many of the most common diagnoses. It is well worth a look: https://media2-production.mightynetworks.com/asset/29819978/cost-of-care-whitepaper.pdf I see it as helping to inform questions such as how much trauma and TPD cover are required, as well as providing some context for typical, as opposed to extreme, values for treatment. Advisers keen on a New Zealand version should let us know - we're contemplating projects for the New Year!


Legal and regulatory review for the life and health insurance sector

10 Nov 2021 – Reading of the following Bills completed in Parliament as shown

11 Nov 2021 – FMA consultation website updated as follows:


Legal and regulatory update for the life and health insurance sector

8 Nov 2021 – Productivity Commission released its preliminary findings and recommendations on immigration settings that are fit for the future, also seeking feedback, with submissions closing on 24 Dec 2021. https://www.productivity.govt.nz/news/immigration-policy-is-disconnected-from-infrastructure-and-housing-supply/

8 Nov 2021 – Takeovers Panel issued a clarifying amendment to the Voting Agreements Class Exemption. https://www.takeovers.govt.nz/guidance/codeword/issue-53/amendment-to-voting-agreements-class-exemption/

9 Nov 2021 – RBNZ advised that it  will be making more data available to all users on our website, sourced from existing surveys of registered banks. It will publish the following new statistical time series:

  • Banks: Assets – Loans by business size (S35) will break business lending down into small, medium and large.
  • Banks: Assets – Loans by asset quality (S50) will show non-performing loans and expected credit losses by sector, including housing and business.
  • Costs on deposits (B7) will express bank interest expenses as a percentage of deposits.

It will also expand the breakdowns available in the following web tables:

  • Residential mortgage lending by DTI purpose use (C40), to include investor borrower types and higher total Debt to Income (DTI) bands.
  • Banks: Income Statement (S21), to include ‘occupancy expenses’ – such as building costs for owned and leased/rented property – as a separate line.

https://www.rbnz.govt.nz/statistics/statistics-news-and-updates


Legal and Regulatory Update for the Life and Health Insurance Sector

6 Oct 2021 – Law Commission launched a review of the law relating to adult decision-making capacity and published the Terms of Reference that will guide the review. This may have a bearing on how you identify and help clients that may be vulnerable in some way, some disabled clients, as well as those of you that may work with very elderly clients. There will be a public consultation process in 2022 and an intent to report to the Minister of Justice by the end of 2023. https://www.lawcom.govt.nz/media-release/law-commission-review-law-relating-adult-decision-making-capacity

6 Oct 2021 – MBIE announced that Government is seeking feedback on creating a Digital Strategy for New Zealand, with a closing date for feedback of 10 Nov 2021.

https://www.mbie.govt.nz/about/news/government-seeking-public-feedback-on-digital-strategy/

https://www.digital.govt.nz/digital-government/strategy/towards-a-digital-strategy-for-aotearoa/have-your-say/

7 Oct 2021 – The Office of the Privacy Commissioner released a paper setting out the position of the Office on how the Privacy Act regulates bio-metrics. https://privacy.org.nz/publications/guidance-resources/biometrics-and-privacy/


Legal and regulatory review for the life and health insurance sector

28 Sept 2021 – FMA released its KiwiSaver Annual Report for the period ending 31 March 2021. https://www.fma.govt.nz/news-and-resources/media-releases/kiwisaver-reaches-81-billion/

28 Sept 2021 - The Government released the draft legislation outlining the details of the policy limiting the right to deduct interest costs on residential property investments.

https://www.beehive.govt.nz/release/details-interest-deductibility-rules-released

https://taxpolicy.ird.govt.nz/news/2021/2021-09-28-interest-limitation-proposals


Legal and regulatory update for the life and health insurance sector

16 Sept 2021 – ASIC in Australia released additional information for advice licensees and financial advisers who are authorised representatives to help them prepare for the commencement of the design and distribution obligations on 5 October 2021. https://asic.gov.au/about-asic/news-centre/news-items/what-the-financial-advice-industry-needs-to-know-about-the-design-and-distribution-obligations/

17 Sept 2021 - Parliament's Finance and Expenditure Committee released submissions made to the inquiry into the current and future nature, impact, and risks of cryptocurrencies. https://www.parliament.nz/en/pb/sc/submissions-and-advice/all?custom=INQ_111968


BBC Series: 100 women masterclass on money

A great episode in the 100 women series focused on Money. You don't have to be a woman to enjoy it and get value from it. Anyone who expects to have women as clients to finds this market important - and I definitely do - may get value from the solid run through many of the basic issues from the perspective of the three experts interviewed:

 


Legal and regulatory update for the life and health insurance sector

13 Sept 2021 - RBNZ Over September RB are conducting a quantitative impact assessment exercise with selected insurers, to help understand the capital impacts of the draft interim solvency standard. They have published a template for feedback. https://www.rbnz.govt.nz/regulation-and-supervision/insurers/consultations-and-policy-development-for-insurers/active-policy-development/review-of-the-insurance-solvency-standards

14 Sept 2021 – FMA stories released comment from Derek Grantham titled “The Goldilocks dilemma (or how to choose the FAP full licence class that’s just right).” https://www.fma.govt.nz/news-and-resources/fma-stories/the-goldilocks-how-to-choose-the-fap-full-licence-class-thats-just-right/

14 Sept 2021 - MBIE sought submissions on whether to reissue the Addendum to the Responsible Lending Code, which elaborates on and offers guidance on how lender responsibility principles and lender responsibilities may be implemented by lenders while dealing with borrowers who have been impacted by COVID-19. Submissions close on 22 Sept 2021. https://www.mbie.govt.nz/have-your-say/addendum-to-the-responsible-lending-code-covid-19

14 Sept 2021 – Commerce Amendment Bill reported back to Parliament from the Select Committee. https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_108304/commerce-amendment-bill

15 Sept 2021 – FMA media release advised that the FMA has seen a spike in investment scam complaints, issuing more warnings, since start of COVID-19. https://www.fma.govt.nz/news-and-resources/media-releases/fma-sees-spike-in-investment-scam-complaints/

15 Sept 2021 – Privacy Commissioner issued a compliance notice to the Reserve Bank of New Zealand, triggered by a cyber-attack in December 2020.

https://privacy.org.nz/publications/statements-media-releases/compliance-notice-issued-to-reserve-bank-of-new-zealand-following-cyber-attack/

https://www.rbnz.govt.nz/news/2021/09/privacy-commissioner-issues-first-compliance-notice-to-reserve-bank-of-new-zealand