How many people have never had a conversation about life insurance?

Okay, I know that life insurance is not quite the compelling subject for others as it is for me, but AIA recently conducted some research which revealed a quite astonishing fact: 

"... two thirds of Kiwis having never had a conversation about life insurance..." 

Thanks to Nick Stanhope, CEO of AIA, for bringing that to our attention. It is a wake up call for the sector. Of course, some people have had a conversation and forgotten it - which is, when you think about it, the same thing. Remember the proverb: "To know, and yet not act, is not to know". Some people are unable or simply do not require cover - but to be unaware of it entirely is a massive failure on the part of the industry. If there is responsibility to be attached to this concern, then it is the responsibility of the industry, not the consumer, to provide a remedy. 


Results of FSC Financial Resilience Index, and more daily news

The FSC has released the latest Financial Resilience Index results. The latest results indicate that New Zealanders are still resilient and confident about financial matters. The index examined views on five indicators: financial confidence, literacy and preparedness, job security and wellbeing. 72% of participants reported that they feel reasonably, very or extremely confident in their financial standing.

“The latest round from the FSC’s Financial Resilience Index shows that despite the last six months being one of the most challenging periods in recent history, New Zealanders have remained remarkably resilient and confident when it comes to financial matters.

The Financial Resilience Index is a major tracking survey of New Zealanders’ views on five key financial resilience indicators: financial confidence, literacy and preparedness, job security and wellbeing.

“The responses in early August show that after initial uncertainty Kiwis remained resilient throughout this unprecedented period, from the introduction of Covid-19, to living in lockdown, right through to the return to alert level one,” says Richard Klipin, FSC chief executive.

“Despite these dramatic changes, New Zealanders continued to have incredible financial confidence, with around 72% of respondents still feeling reasonably, very or extremely confident when it came to their finances.”

The index found that although there is underlying anxiety, New Zealanders remain resilient. The FSC’s findings differs from the key findings of Cigna’s COVID-19 Global Impact Study, which highlighted that the majority of its 20,000 participants have a pessimistic view on their financial position.

In other news

Cigna: Cigna Parenting Survey 2020 found that 36% of parents surveyed had a will but no life insurance

FMA revealed that full licence provisions would be released mid-November  during FSC conference

Financial Advice: New board members announced at Financial Advice NZ


FSC Generations: Accelerating the customer agenda. What needs to be true?

Session title

Accelerating the customer agenda. What needs to be true?

FSC Generations conference - 3.30pm on Tuesday 13 October. 

Session content

The customer agenda isn’t going away. If anything, relative to other industries and global practices, New Zealand’s insurance industry is facing into expectation and experience headwinds that will test even the most imaginative. So how can the industry step up to the plate and deliver meaningful strides forward? Is it necessary even? Or are we already doing enough in the shadow of the FMA’s thematic review?

This year’s panellists:

  • Gail Costa, Chief Executive Officer, Cigna Life NZ

Gail has led the Cigna New Zealand team through a period of growth and change since returning home in 2018. With over 18 years of executive experience with the company, Gail has held CEO positions in Turkey, Hong Kong and Europe. She also led the New Zealand business from 2003-2013.

Prior to joining Cigna, Gail was the General Manager Operations for Royal Sun Alliance Life Insurance. She has also held finance, marketing and operational positions at Colonial Mutual Life, New Zealand Council for Educational Research and AMEV Life. Gail is a qualified accountant and holds a bachelor degree in Commerce and Administration from Victoria University and a Diploma in Direct Marketing from the Institute of Direct Marketing, London, UK.

  • Nick Stanhope, CEO, AIA

As CEO for AIA New Zealand, Nick is proud to lead a passionate team of over 1000 people with the goal of making New Zealand one of the healthiest and most protected nations in the world. With over 28 years of experience in the financial services sector, Nick has held a diverse range of senior leadership roles in New Zealand. Nick was most recently CEO of Sovereign for two years. Prior to this, Nick held a variety of senior leadership roles at ASB Bank Limited. These included Executive General Manager of Wealth & Insurance and other key roles across business banking, retail specialist services and corporate banking. At the beginning of his career, Nick spent seven years at NCR Corporation, including three years with AT&T. Nick has a Bachelor of Science in Computer Science and is a Board Member of the Financial Services Council of New Zealand. Born and raised in Auckland, Nick is married with two daughters. He is passionate about health and wellbeing, and in his spare time is a keen cyclist and gym goer. He has also competed in triathlons and Ironman events.

  • Don Allerston, Financial Services Executive

Don describes himself  as a customer first thinker - before it became fashionable; the result of over 28 years’ experience in and about the industry both on and off-shore. Indeed, far from being institutionalised as a result of his time in financial services, Don has chosen instead to constructively disturb our space for what he sees as the continuing need to press for experience-first change beyond traditional perspectives.

Prior to spending 8 years on the Asteron Life and Fidelity Life executive teams, Don has occupied senior roles with some overseas blue-chip organisations including AMP UK Financial Services, British Airways, AXA and Royal and Sun Alliance. A self-confessed ‘overseas souvenir’, Don married his Kiwi partner in Wellington back in 2005 before migrating from the UK in 2010. He became a New Zealand citizen in 2016.

  • Russell Hutchinson, Principal, Chatswood Consulting

Russell Hutchinson, is a director at Chatswood Consulting Limited and runs the management consultancy. Russell is also a co-founder and director of Quality Product Research the company that runs www.quotemonster.co.nz. Through extensive domain knowledge of the marketing challenges for life and health insurance lines of business

Chatswood offers specialist management consulting business for insurers and larger adviser businesses. Russell believes that good decisions are built on good information and good options. His work includes product development, distribution strategy, advice process, and digital projects. Russell writes regularly on industry issues at www.goodreturns.co.nz, in Asset magazine, and at www.Chatswood.co.nz on personal insurance products and wider financial services sector issues.

  • Mark Banicevich, Industry Engagement Manager, Partners Life

Mark is Industry Engagement Manager at Partners Life, and his role includes developing strategies to help financial advisers transition to the forthcoming advice regime. Previously, Mark worked in intelligence at the Financial Markets Authority, where he drove the project reviewing replacement business in life insurance, which won an innovation award from the NZ Institute of Intelligence Professionals. Mark also teaches strategic management accounting at The University of Auckland Business School, and runs an International Taekwon-Do school.

Why you would attend

The line-up of panellists provides professionals in the industry the opportunity to gain a better understanding of potential changes needed to stride as far forward as possible in the future to withstand any challenges or do they believe we are already doing enough.

Benefits of attending:

  1. Independent industry expert insights
  2. A look into the future of insurance in New Zealand
  3. Discover if we as an industry are doing enough based on the FMA’s thematic review

Pinnacle Life unpack life insurance discussions, and more daily news

Pinnacle Life has published tips on how to discuss life insurance with a significant other. Pinnacle Life begins by encouraging those that have never discussed money or life insurance with their partners to do so as it is an important part of planning for the future.

“Talking about life insurance means talking about death. No-one finds that easy. Pinnacle Life has some tips to get you started with talking about money and life insurance with your partner.

Not many of us have been taught how to have conversations about financial decisions. In fact, financial literacy hasn’t been on the school curriculum for very long at all – at best, it’s still optional for most schools today. There seems to be an underlying assumption that financial literacy is something you can learn yourself or pick up from your parents. But evidence suggests it’s not that easy; New Zealanders are notoriously underinsured and ‘under-saved’.

In a time when the news is filled with death rates, recessions and industry failures and many of us are facing reduced incomes, it’s a reminder that it’s never too soon or too late to start having conversations about our finances and insurance. We know that it's not easy to talk about money openly and honestly; talking about life insurance can be even harder because it means talking about what will happen if you die.”

Tips include:

  1. Conducting independent research
  2. Choosing the right time to have the discussion
  3. Taking your time to plan and execute
  4. Start by looking at the big picture before honing down to the details
  5. Embrace the emotions that arise
  6. Discuss your money objectively
  7. Seek advice from a professional

Click here to see all the details

In other news

nib: new customers that sign up for Ultimate Health Max, Ultimate Health and Easy Health policies using nibAPPLY will have 2 months free until 31 January 2021

Southern Cross: 72% of all claims were paid out in 2020

82% of customer channels are now fully digitised and over 96% of claims now submitted digitally

The power of social media- Russell Hutchinson writes on goodreturns


AIA initiative to combat underinsurance, and more daily news

AIA has announced that eligible policies allow customers to pay it forward by gifting life insurance.  In a study commissioned by AIA, it was found that New Zealanders are underinsured and rank poorly when compared to other OECD countries as they often don’t want to think about death and the financial implications of dying on loved ones.

“New eligible AIA policies come with the option to gift life insurance to a loved one

New independent research commissioned by life, health and wellbeing insurer AIA New Zealand highlights some of the reasons why New Zealand ranks near the bottom of OECD countries  when it comes to insurance protection.

The research reveals more than a third of Kiwis don’t want to think about the idea of dying and haven’t considered the financial impact it would have on their family.

Two thirds of those surveyed said that they’d never had a conversation with family about life insurance when they were growing up and one third 4 said that they don’t understand the benefits of life insurance. More than half 5 have never tackled the topic of what would happen to their finances if they were unable to work due to death, serious illness, or injury.”

Nick Stanhope, AIA NZ CEO, said that New Zealanders need to plan for the future. To help encourage the discussion and planning process AIA has announced the introduction of the Share the Love initiative. The initiative will run from 28 September 2020 and 28 February 2021 and will allow customers to gift a six-month $50,000 policy for free.

Nick Stanhope, AIA New Zealand Chief Executive, says New Zealanders need to become more comfortable with planning for their future and with having conversations about financial protection.

“Our research shows that New Zealanders generally don’t like to think or talk about these difficult but necessary topics. When it comes to protecting our finances and wellbeing our lack of financial planning is leaving us behind most other OECD countries.”

“At AIA, we want to make it easier for New Zealanders to have a conversation about why life insurance is important. It’s why we’re encouraging all new eligible policy holders to Share the Love.”

AIA’s Share the Love is a first-of-its-kind initiative in New Zealand where new policy holders are encouraged to gift a free six-month $50,000 policy to a loved one." Click here to read more

In other news

Financial Advice: Bring in the Experts: Unlocking the Code in the New Financial Advice Regime - Part 2

Financial Advice: Special General Election Debate - 2020 Election Economic Debate

FSC: Get In Shape Webinar Series: Session 10 - Privacy - Reviewing your obligations under the Privacy Act


New Zealand’s population nears 5.1 million

Stats NZ announce that population growth appears to have accelerated. 

New Zealand’s estimated resident population reached 5,084,300 at 30 June 2020, Stats NZ said today.

These are the first population estimates to fully incorporate the 2018 Census and 2018 Post-enumeration survey (PES) results.

"One of the purposes of running a census is to recalibrate national and subnational population estimates," population insights senior manager Brooke Theyers said.

"The census coverage results from the 2018 PES, also released today, are crucial to ensure the population estimates are the best possible measure of how many people live in every community across New Zealand."

This is a normal revision of population estimates that takes place after census and PES results are available. Estimates back to 2013 have now been revised. Estimates after 30 June 2018 now use the 2018-base estimated resident population as the starting-point.

New Zealand's resident population based on the 2018 Census is estimated to be 4,900,600 at 30 June 2018. This is higher by 60,000 than the previous estimate at that date. The population is estimated to have eclipsed 5 million in September 2019. Provisional estimates initially indicated the milestone was reached in March 2020 (see New Zealand’s population passes 5 million).

"The updated estimates confirm that the growth of New Zealand's population has been relatively high, averaging 1.9 percent a year in the 7 years ended June 2020," Mrs Theyers said.

"Growth in the previous 20 years averaged 1.1 percent a year."

The higher population growth since 2013 was driven by net migration (migrant arrivals minus migrant departures), which contributed two-thirds of the growth, or an average of 56,000 a year. Natural increase (births minus deaths) contributed the remaining one-third, or an average of 27,500 a year.

In updating market dynamics for modelling future opportunities the normally resident population is the defining variable for the boundary of the market. Growth means we expect added opportunity for insurers, although we look for that in the working age population sub-segment.

Two charts illustrate the growth: 

Annual population change
Annual population change

 

 


Asteron Life introduces mental health support, and more daily news

Asteron Life announced that the Best Doctors service will provide free access to different mental health experts to customers with disability insurance. The service will allow customers to access general advice as well as services from psychologists and psychiatrists. 

“Asteron Life today announced that customers with disability insurance will now have access to the Best Doctors service at no additional cost. The Best Doctors package provides direct access to a multidisciplinary team of mental health experts, including psychologists and psychiatrists, as well as general advice on mental health conditions and guidance on how to navigate the mental health system.”

Graham Hill, executive manager Life Distribution said that Best Doctors works to ensure customers are connected and make medical decisions with confidence. Graham continued by saying that having access to expert medical advice in the current environment is relevant while Mike Morris, the country manager of Best Doctors said that the importance of virtual care has been highlighted this year.

“Best Doctors connects our customers with leading medical specialists, and enables them to make medical decisions with confidence,” says Graham Hill, executive manager Life Distribution at Asteron Life. “Like insurance, the service is really about being there for people when it matters.”

 

Hill says that in the current Covid-19 environment, mental health support and the ability to get expert medical advice from your own home is particularly relevant.

 

Mike Morris, the country manager of Best Doctors has said “This year has shown us that virtual care is incredibly important and effective. There has never been a better time to offer people access to virtual care and we’re delighted to be bringing new services to Asteron Life customers.”” 

Asteron Life is offering advisers virtual training sessions. Times available are:

·       09:30am – 10:30am, September, Wednesday 9

·       09:30am – 10:30am, September, Thursday 10

·       09:30am – 10:30am, September, Monday 14

·       09:30am – 10:30am, September, Monday 21

·       09:30am – 10:30am, September, Monday 28

 

Click here to register

Click here to read more

 

In other news

RBNZ: Has the Reserve Bank responded differently to upturns and downturns in inflation and economic activity?

FMA: COVID-19 response insights

Financial Advice webinar: Panel Discussion: Obtaining or Updating your Level 5 Qualification in Financial Services

 


Legal and regulatory update for the life and health insurance sector

4 Sept 2020 – The FMA released a consultation paper on the proposed Auditor Regulation Act (Prescribed Minimum Standards and Conditions for Licensed Auditors and Registered Audit Firms) Notice 2020, intended to replace two previous notices proposed to be revoked. Submissions close on 21 Sept 2020. https://www.fma.govt.nz/compliance/consultation/consultation-prescribed-min-standards-conditions-licensed-auditors-registered-audit-firms/

2 Sept 2020 – FMA issued a warning that it is aware of a case where scammers have been impersonating the FMA while operating a scam relating to money remittance services. https://www.fma.govt.nz/news-and-resources/warnings-and-alerts/fma-impersonated-in-suspected-money-remittance-scam/

3 Sept 2020 – Deloitte issued a paper commissioned by Partners Life exploring observations made in the RBNZ Bulletin, which provided commentary around the profitability of New Zealand’s life insurers, the value for money of life insurance, and life insurers’ ability to meet minimum capital requirements.

https://www2.deloitte.com/nz/en/pages/financial-services/articles/deloitte-issues-paper-life-insurance-sector.html#

3 Sept 2020 – The Commerce Commission announced that it has signed a multilateral framework enhancing international cooperation on competition enforcement with the Australian Competition and Consumer Commission, the Competition Bureau of the Government of Canada, the United Kingdom Competition and Markets Authority, the United States Department of Justice and the United States Federal Trade Commission.

https://comcom.govt.nz/news-and-media/media-releases/2020/commerce-commission-signs-multilateral-framework-enhancing-international-cooperation-on-competition-enforcement

3 Sept 2020 – FMA update released which included the following new material:

  • The release of three short videos for consumers about getting financial advice featuring Investor Capability Manager Gillian Boyes together with a related Spinoff article. Related weblinks at
  • World Investor Week 2020, starting Monday, 5 October.

Related weblinks at https://www.fma.govt.nz/investors/getting-financial-advice/ and https://thespinoff.co.nz/money/12-08-2020/everything-youve-always-wanted-to-know-about-financial-advisers/


Partners Life update waiting period restriction on QFA, and more daily news

Partners Life has announced that the waiting period restrictions for self-employed customers have been lifted from QFA. The revision to waiting periods was applied to Quote and MUM immediately after the announcement in July. The update to QFA means that advisers can quote all wait period options for their existing clients’ Income Cover, Mortgage Repayment Cover and Household Expenses Cover.

 

“In late July this year we announced a revision to our restrictions on waiting periods for self-employed customers, allowing you to quote all waiting periods on Income Cover (Indemnity Loss of Earnings), Mortgage Repayment Cover and Household Expenses Cover.

 

“The system changes were applied immediately to Quote and MUM allowing you to quote and apply for cover for new clients. The system updates to Quote for Alteration (QFA) required additional time to implement and we advised short-term workarounds to quote on waiting period changes for your existing clients.

Today we are happy to confirm that restrictions on waiting periods for self-employed customers have now been removed from QFA.

Effective immediately you can now quote all wait period options for your existing clients’ Income Cover (Indemnity Loss of Earnings), Mortgage Repayment Cover and Household Expenses Cover.

In other news:

Fidelity Life: MedScreen is currently not operating in Auckland, MedScreen paramedical visits are still happening in other regions

Fidelity Life: it is recommend that all new business is submitted via e-App

Women in Insurance New Zealand goes virtual

FSC: Get In Shape Session 7: Using Technology to make your business more effective

 


FSCL complaint foreshadows implications of non-disclosure, and more daily news

After speaking with an adviser a woman proceeded to cancel her $300,000 policy and add a trauma/critical illness policy. After suffering a back injury a month after making the changes, the woman’s claims were denied.

“The woman met with an insurance adviser to review her cover – she already had a $1 million life insurance policy with one insurer and another $300,000 policy with another, but no trauma, critical illness or mortgage replacement cover.

The adviser recorded that she was working 28 hours a week as an accountant in her own company and studying part-time.

It was recommended she combine her life insurance policies with one of the existing insurers and cancel the $300,000 policy. The adviser also said she should include some trauma or critical illness cover and mortgage protection cover in case she could not work for a period of time.

The woman accepted the adviser’s recommendations. She cancelled the $300,000 policy and a new policy providing cover for trauma/critical illness commenced in October. In November she tripped and fell, injuring her back.”

When speaking with the adviser the woman noted that she worked 28 hours and studied part-time, when claiming she told her insurer that she worked 30 hours a week and informed ACC that she worked 40 hours a week. Her insurer discovered that she wasn’t  working and instead was a full-time student. The woman proceeded to lodge a complaint against the adviser stating that she wasn’t informed that she would need to provide financial statements and a result of the advice she’s cancelled her $300,000 policy.

“She submitted a claim under her trauma/critical illness insurance, stating that she had been working as an accountant for 30 hours a week. She also stated on her ACC form that she had been working for 40 hours a week.

When the insurer asked for documents to corroborate her income, she was unable to provide convincing information. The insurer then discovered that she was a full-time student. The insurer declined the claim and voided the new insurance policies but later reinstated the $1 million life policy that she had before the changes were made.

The woman complained that the advice she had received from the adviser caused her to lose the $300,000 life insurance policy that she had cancelled on the adviser’s advice. When the complaint was not able to be resolved directly with the adviser, she went to FSCL.

She told the dispute scheme the adviser had not told her she would have to provide financial statements to support any claim.”

Although the FSCL concluded that the advice given was sound advice, the chain of events highlights the importance of risks of non-disclosure.

““We were satisfied that the advice to increase the cover with one insurer and cancel the smaller policy was sound advice and had not caused any loss,” FSCL said.” Click here to read more

Advisers reading the reports will notice inconsistencies and gaps. The story is plainly larger and more complex than is being shared. As such, there is no real basis for making form judgments. In more general observations we should probably note the increasing likelihood of client complaints and the difficulty of managing disclosures - making sure that clients are really clear about the importance of accurate disclosure and helping them to achieve that - for their benefit and ours. After all, complaints just cost us all money and reputation. 

In other news:

Southern Cross: a Risk Partner – Sales and Marketing role is currently being advertised

Strategi: Strategi are offering remote AML/CFT audits

RBNZ: Reserve Bank extending mortgage deferral scheme

RBNZ: Monetary Policy Statement Explained Q&A with RBNZ Chief Economist and External MPC Member

FMA: Sorted Money Week has begun