nib Putting Health into Life seminar, and more daily news

nib will be holding seminar series, Putting Health into Life and Work from July 28 to August 14. The seminars will include different speakers that will touch on different healthy living points. As part of the series group insurance as well as the benefits in the current climate will be discussed.

"Our speakers will explain the powerful reasons you can share with your clients around why health comes first and where it fits in the advice process. 

Our Group Sales team will also join our speaker panel to explain why group health is even more relevant as an employee benefit and equip you to access this market with confidence in a post COVID-19 lockdown world."

Different topics relating to health in life and work will be explored in the seminars. Topics include:

"Putting Health into Life

  • Health insurance and the public health services
  • How health insurance meets client’s needs and expectation at various life stages, while complementing other living insurances
  • Understanding life circumstances and expectations
  • Assessing value through premiums and claims

Putting Health into Work

  • Why health insurance is important to employers and their employees
  • How group health can accelerate your business growth
  • nib’s group health value proposition: putting the wellbeing of employees first
  • Supporting you to access this market with confidence"

Click here to register

In other news:

Expert says financial advice is key to emerging from a downturn

FMA:CONSULTATION: Review of 16 class exemption notices expiring in 2021

What I'm seeing at the moment - Philip Macalister's Blog

 

 


Vulnerable customers

Understanding what vulnerability is, identifying vulnerable customers as well as

considering the needs of your vulnerable customers should be an integral part of your adviser business service. But sometimes this isn’t the case.

Let’s begin by first looking at what a vulnerable customer is. Although vulnerability is difficult to define as well as difficult to attribute, the New Zealand Human Rights Commission broadly defines vulnerable customers as being people who are less likely to cope with and recover from stresses and pressures. Determining vulnerability within the insurance industry is equally difficult to pinpoint. The Human Rights Commission suggests that those working in the insurance industry exercise flexibility to ensure accommodation.

Now that we have broadly defined vulnerable customers, let’s take a look at the proportion of insurance customers that are vulnerable customers. Insurers consistently identified around eight percent of their customers to be vulnerable. That is a significant number. They probably work with advisers in the usual proportions - so you may expect that about 8% of your clients are vulnerable at any given time. With information insurers supplied, the Human Rights Commission was able to generate a suggestive list of vulnerability criteria. Two categories were created. The first category identified that customers can be vulnerable irrespective of other factors. Identified factors are:

  • Health or disability situations
  • Living situations
  • Family situations
  • Age
  • Geographic and or environmental factors
  • Living in non-English-speaking households

Insurance advisers should be particularly concerned about vulnerable customers as most clients that have experienced a claimable event will probably qualify due to health, financial circumstances, and possibly living situation.

In the second category, vulnerability was found to result from intersecting factors. This means that customers are vulnerable not because of one or more overarching

factors of vulnerability, but because several ‘milder’ factors of vulnerability intersect. Identified factors are:

  • Health or disability situations
  • Living situations, including employment, geographic location and dwelling
  • Family situations, including support provided by family, friends or support services
  • The degree of support they provide to other people, especially family members
  • Age
  • Ability to understand insurance policies and processes.

Keeping vulnerability at the forefront of our minds allows us to accommodate vulnerable customers at all stages. The Human Rights Commission notes that consideration of vulnerability can be built into business operations from the point of sale to the time of claim. This works to add value to business by valuing customers and better managing risk.

It is paramount to understand that the same factors can impact people very differently. This means that we cannot state the severity or mildness of a certain factor. It is equally important to understand that people aren’t limited to the number of factors they are exposed to at a single period. In some circumstances, people can be exposed to multiple factors of vulnerability. And lastly, the factors of vulnerability and periods of vulnerability can change over time.

This fits well with the FMA’s view that vulnerable customers are not so much ‘types’ as circumstances.


Making a living will

Insurance is, of course, about planning for a future event before it happens. For life insurance, it is often described as a fundamentally altruistic purchase: you buy it to benefit someone else. Of course, the holder does enjoy a benefit, which is peace of mind. The planning helps us to relax a bit about the future, a future we know is coming for us: one day our life will end. Making a living will is also a kind of plan. A way to say some of the more difficult things, or put in focus some of the things you would most like to be remembered for. At this link you will find a beautiful article about a living will and what it meant to the family. https://www.huffpost.com/entry/ethical-will-legacy-letter-why-you-want-one_n_5eeb7a09c5b6c8594c7f2d03 About a ten minute read and well worth it. 


Market movements: what changes the size of the market for insurance?

The market for insurance is affected by three main factors: 

  • The size of the eligible population 
  • Their need for insurance
  • Their ability to pay for it

Rob Dowler, our preferred compliance consultant for large projects, suggested that I expand on the role that immigration plays in the growth in our market and whether that places constraints on whether people can buy insurance. 

Some additional information about how the size of the eligible population changes can help to put this into the right context. Showing data from 2018 to illustrate how a more 'normal' year works, accepting that 2020 is far from normal and there has been a sharp rise in both long-term departures and long-term arrivals, and a sharp decline in short-term departures and arrivals.

New working age residents added about 44,000 people, plus there were about 62,000 children who reached working age. This addition of just over 100,000 was somewhat off-set by 44,000 people who reached retirement age and about 8,000 people who died during working life. These movements exclude those people on student or short-term working visas. Although a number of students eventually become permanent residents, they are only counted when they achieve that status. 

We have tended to assume that demand for insurance is constant on a per person basis. Of course, it isn't. Usually debt increases the demand for cover, but not all debt is equal. Household debt is usually insured, consumer credit debt often isn't - so as home ownership rates have dropped due to the high cost of housing, there has been some hit to demand. But this is a very small reduction in demand compared to the size of the underinsurance gap - which we estimate to be about a million people who are in-work. 

The ability to pay for cover receives only modest attention, usually as we consider the cost of cover relative to age. It will receive additional attention as the economic crisis associated with the COVID-19 pandemic plays out in New Zealand. Unemployment is forecast to rise from a little over 4% to about 10% under even the best case scenario. We can expect to see a reduction in average household income for the current quarter and very slow real wage increases in the next couple of years. Limiting the ability of New Zealander's to pay for cover will cause an increase in lapse rates. The interaction of the high cost of housing and lower wage growth will constrain a proportion of budgets. 

 


Cancer diagnosis concerns

About a five minute read, this article covering concerns about catching up on delayed cancer diagnosis caused by the lock-down is well worth the read. I expect that we will not know the full impact (or which of the views in the article is more correct) for some time - possibly years. It is worth considering that the options were grim - without a strong response to COVID-19 then many people with cancer, who are immune compromised, would have died from COVID-19. The choice made may well have been the best possible choice, which still doesn't make it any easier for people concerned about the impact on their cancer prognosis of a delayed diagnosis. 


Daily news update: nib offers continued support to members, and more stories

nib announced that it will offer members continued support in the form of their COVID-19 member and community support package. The support package will be offered until 30 September 2020 to ensure that members are able to maintain their health. cover.

“nib New Zealand (nib) today announced it will offer its COVID-19 member and community support package for an additional three months to make sure members continue to stay safe and healthy by maintaining their private health cover as New Zealand recovers from the pandemic.

nib Chief Executive Officer, Rob Hennin, said that while lockdown restrictions have eased and more healthcare services are now available, the COVID-19 pandemic will continue to have ongoing financial and health impacts on New Zealanders.

“We recognise many of our members have experienced financial uncertainty and additional stress during this difficult time, and we want them to be able to continue to prioritise their health and wellbeing,” Mr Hennin said.

“By extending our support package we hope this provides both our members and the community with additional support to assist them as we return to a new normal,” he added.”

nib is offering:

  • Ability for eligible existing members who are experiencing financial hardship to access special premium relief*.
  • Ability for eligible existing members who are experiencing financial hardship to suspend* their health insurance policy and premium payment for up to six months.
  • Expanded coverage* for chest, lung, kidney and bladder or other treatment related to conditions caused by COVID-19 across all levels of hospital cover (including Basic Private Hospital Cover, Mid Private Hospital Cover and Mid Private Hospital Cover Plus where currently excluded) at no additional cost.
  • Cover for GP or specialist consultations that need to be conducted via video or tele-consultation due to COVID-19*.
  • Automatic increase of pre-approval validity to six months meaning members do not need to reapply for pre-approval if they experience delays to hospital treatment#.
  • Ability for existing members to increase their excess (payable upon hospital admission) to the maximum allowable level under their policy without needing to be re-underwritten if they choose to reduce their excess as their financial situation improves^.
  • Help for members navigating COVID-19 by publishing across our various channels (including nib.co.nz) information on their cover, how to minimise infection risk and related matters.
  • A $1 million donation from nib foundation and nib to support charitable initiatives, including Lifeline Aotearoa and Clearhead, to assist the community across New Zealand and Australia during the pandemic.
  • Offering up to two weeks paid special discretionary leave for all nib Group employees (permanent, fixed-term or casual) who are impacted by COVID-19.

In other news:

Financial Advice: Bring in the Experts – What’s next for FSLAA: An update from the FMA on progress and the path ahead

Financial Advice: Expressions of Interest to join the Association’s Certification Committee now open

CoFI: watch the select committee


Daily news update: Partners Life predictions for increased suicide claims, and more stories

While there aren’t usually many suicide claims made, Partners Life is now predicting that there will be an increase in suicide claims in the foreseeable future. Naomi Ballantyne has linked the economic effects of the pandemic to increased mental health problems and self-harm.

“Life insurance company Partners Life expects a rise in suicide claims as a result of businesses failing in the economic downturn caused by the Covid-19.

"We've certainly experienced already suicides that are directly related to businesses being shut down," Ballantyne said.

The Covid-19 economic crisis was putting unprecedented pressure on businesses and their owners, and there have been predictions the pandemic could result in a rise in self-harm.

Business failure could have an intense emotional impact on individuals, and business failures were sometimes implicated as a factor contributing to owners' sudden deaths.

In desperation, people sometimes convinced themselves that their families would be better off with a payout on their life insurance policies than with them remaining alive, Ballantyne said.” Click here to read more

In other news:

FSCL: FSCL's 'allegations against a very senior parliamentary officer' This covers the issue of the right to use the word 'ombudsman'

Reinsurance sector won't achieve cost of capital in 2020, outlines Fitch Of course, many categories of business will not achieve their cost of capital. 

Financial advice saving retirement futures: Adviser This trend isn't confined to KiwiSaver advice either - events cause people to reflect on their contingency planning, including risk.

ASB: ASB to waive home loan interest, if a borrower dies


Daily news update: Cigna price changes introduced, and more stories

Cigna has made price changes to a number of products. The range of the changes are detailed in the table below. You can tell from the variety of changes that this is a complete repricing exercise - not merely an increase or decrease of a blanket percentage. Some prices will be much more competitive. Some segments are being increased. The only way to know for certain, is to do a comparison for each life. That's why a price comparison across the market is vital if you wish to offer help to clients seeking the most competitive products. Quotemonster still offers free price comparisons for financial advisers with an FSP number and an email account. 

YRT Life

11/05/2020

From -12% to +8%

Level Life

11/05/2020

From -24% to +1% Non-Smokers & Female Smokers, from -17% to +8% Male Smokers

Trauma

11/05/2020

From -13% to +10% Non-Smokers & -3% to +15% Smokers

Level Trauma

11/05/2020

From -16% to +10% Non-Smokers, -16% to +18% Smokers

Income Protection

11/05/2020

From -1% to -2%

Mortgage Protection

11/05/2020

From + 5% to +25% Female, from +7% to +20% Male. As per discussion, indexation was previously offered free for the first year.

In other news:

AIA: Mentemia, a mental wellbeing app, is now part of the AIA Vitality program.

AIA: Clients can get one month’s premium free when they apply for a new eligible AIA policy between 5 March 2020 and 31 May 2020 and have the policy issued by 31 July 2020.

Partners Life: The automatic COVID-19 Mental Health exclusion that was applied to disability and business risk benefits has been replaced with more targeted and specific underwriting processes.

Partners Life: Clients who had the automatic mental health exclusion applied will have it replaced with an emergent mental health exclusion.

Partners Life: Underwriting restrictions 2020