Asteron Life SME insurance index 2020 findings, and more daily news

Asteron Life’s insurance index 2020 provided insight into the insurance-related decisions made by SMEs. The index illustrated that the number of SMEs with multiple life insurance cover decreased when compared to the findings of 2019, with 38% of SMEs having only one life covered in 2020 and 32% of SMEs having only one life covered in 2019. The index highlighted a decrease in SMEs seeking advice from financial advisers and insurance companies and an increase in independent navigation. The findings of the index conclude that SMEs that received advice were more likely to have a broader range of cover. Of the SMEs that sought advice from advisers, 89%  had life insurance cover, 50% had IP cover, 66% had trauma, illness, cancer cover and 50% had TPD cover. Of the SMEs that didn’t receive advice, 88% had life insurance cover, 27% had IP cover, 43% had trauma, illness, cancer cover and 27% had TPD cover. Click here to see all findings of the 2020 index

 

In other news 

Russell’s piece in Good returns: Data versus human

FMA: Insurance Business "ANZ admits to misleading customers about credit card insurance"

 

 


The battle against cancer: what has worked and what remains to be done

Stephen Dubner, and economist, talks with Ned Sharpless, director of the National Cancer Institute (USA) about cancer research and how to fix the incentives to achieve better outcomes. The podcast includes a great discussion about what progress has been made, recent breakthroughs, and the big gaps in treatment development along the way. At this link: https://freakonomics.com/podcast/cancer/ 


Legal and regulatory update for the life and health insurance sector

27 Jan 2021 – Privacy Commissioner announced that he will virtually chair an international Computer Privacy and Data Protection conference over 27-29 Jan, commencing NZ time 5 p.m. on Thursday, 28 Jan, with a live stream available. https://www.privacy.org.nz/resources-2/forums-and-seminars/computer-privacy-and-data-protection-conference-cdcp/

28 Jan 2021 - FMA released its review of NZX technology issues finding the stock exchange failed to meet its licensed market operator obligations due to insufficient technology resources. NZX also released a response to the FMA review. Relevant FMA and NZX web links are https://www.fma.govt.nz/news-and-resources/media-releases/fma-releases-review-of-nzx-technology-issues/ and https://www.nzx.com/announcements/366811

28 Jan 2021 – RBNZ released the results of a research report showing the Māori economy is increasingly diverse and opportunities remain for it to continue growing and reach its full potential. https://www.rbnz.govt.nz/news/2021/01/e-hauora-ana-e-matahuhua-ana-te-ohanga-maori-e-ai-ki-nga-rangahau


The value the government places on your life - and what it means

Jonathan Milne, writing for Newsroom, has an excellent article that works through the history of the price that government places on a life - It is called VOSL, the Value of Statistical Life. This is the price the government uses for investment decisions, for example, about road funding - anything where lost lives avoided is going to be a major factor in the funding case. The article provides excellent insight into the formulation, and what it means when comparing what we spend on road, PHARMAC, and other programmes. It is currently $4.53 million. Link: https://www.newsroom.co.nz/transport/government-valued-your-life-at-46m-until-covid


Numbers are numbing - it is stories that get us, and our clients, to make good choices

I am not thrilled with checking on COVID-19 numbers. You have probably done this quite a bit over the last year. It is hard to believe that at this date last year was the first point at which human to human transmission was confirmed by a Chinese scientist. There would still be weeks before it became clear that this was going to be a global pandemic, and it was not until the end of March that we realised how bad, and therefore how serious the response would need to be. Things changed rapidly. Throughout that period I have checked various statistics sites, built models, talked with insurers about impacts, reinsurers, and gathered information that is relevant to the sector. I am not exactly sick of it, but the grim reality does weigh one down.

But these are merely numbers. I know, of course, that each number is a precious life lost. Even for many of the survivors there are very long-lasting effects. But the numbers never quite make it real, in some way, they overwhelm. This is a lot like using statistics to try and convince a young couple that they might need insurance. It is simply too hard to see themselves as one of those numbers. It is the emotional pull of real life that brings the issues home to me:

In March last year, my first experience of a friend with Covid-19: they flew back from the United States sitting next to someone on the plane 'who coughed a bit' - a few days after landing here, in isolation, they found they had Covid-19. That was months ago, she still has difficulty walking any significant distance. 

A distant relative, elderly, hospitalised during the first wave in the UK, caught Covid-19, and impressively, at 98, survived. My father does volunteer work collecting food for his church to distribute through their food bank. It is a great job to have in retirement. He's in his late 70s and still collects - even though it isn't safe, really, for him to do so. Three of his friends have had Covid-19 - fortunately they all survived. A friend in the church, her son who worked in Spain was critically ill - fortunately he survived. 

But so many don't live through it. You can see accounts of lots of people. Check out the BBC website. But again, more directly: last night I was on a zoom call which largely hosted people in the UK. There were 88 people on the call. Two who spoke had family members die in the last week. One woman's mother died during the week from Covid-19. One man lost his best friend 'choked to death' he said by Covid-19. Both in the last week. 

 

 


Partners Life study on effects of COVID-19 on perceived value of insurance, and more daily news

A survey conducted by Partners Life and Kantar found that regardless of COVID-19, the majority of participants didn’t see the significance of insurance. The survey results were based on the response of 900 participants aged between 18 and 54. Of those surveyed, 74% stated that their views hadn’t changed regardless of COVID-19. The survey found that the majority of those that didn’t believe they needed insurance shared this view. Participants that said that they were likely to take out insurance were more likely to be of Asian descent (40%), between the age of 24 to 35 (35%), be in the $75,000-$100,000 income bracket (35%), and male (27%). In response to the survey results Unhappily Ever After was launched to challenge the current thinking of New Zealanders.

“Despite the huge impact of the COVID-19 pandemic on daily life, a significant number of consumers reject the concept of insuring their lives, health and income.

This was revealed by a survey conducted by Partners Life and Kantar in October.

The survey polled 900 consumers in New Zealand, aged 18 to 54. It found that 74% said their feelings around insurance have not been impacted by COVID-19. This was especially pronounced among the rejecter group at 84%, while only 54% said so among those who were considering buying life insurance in the next 12 months.

Those who became more open towards insurance as a consequence of the pandemic were more likely to be male (27%); younger people of 24 to 35 (35%); people of Asian ethnicity (40%); and people in the $75,000-$100,000 income bracket (35%) – compared with a figure of 24% for overall respondents who said so.

In response to the results of this survey, Partners Life launched a new advertising campaign known as “Unhappily Ever After”, which features familiar nursery rhymes and appealing to those with young families and middle-aged individuals - the life stages where responsibilities are at their heaviest.” Click here to read more

In other news


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. 


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