moneyblog

Understanding the preference of younger customers

As someone that fits into under 45 category, I am not surprised that those surveyed under 45 prefer to use electronic methods of communication. Through the use of electronic methods, you can easily and clearly express your interest, issues and concerns anywhere and at any time.  In order to serve all segments of your market, it is important to understand their preference. Click here to read Tony Vidler’s take on this topic

Does robo-advice worsen bias and can AI fix that?

There is a concern among regulators that robo advisers do not make their selection process clear to customers - so algorithmic advice may be biased, especially in those cases where there is a choice of product providers. There are several ways such sites can lead clients to believe that their choice is perhaps wider and the process fairer than it might be. One is simply the way the starting set of companies is selected - if you have a mid-market product and you want to favour that one then it is easy to only select products that are in some obvious way 'worse' - say more expensive or offering less cover. The manner in which you apply selection criteria can affect outcomes too. If you apply selection criteria in a series of 'rounds' where you eliminate products you can imagine that if you knock out, say, all the products that are more expensive first, then in the second round you may find it easy to win on a coverage criteria. Even considering criteria in a balanced scorecard can be  gamed in some ways - such as the weighting applied to each factor. That is why the Financial Conduct Authority in the UK is interested in how robo-advice works, and in particular how they meet requirements to check suitability, but also other advice safety issues.

It is not just bias in sales that concerns us - it also happens in underwriting and probably in claims. Humans are prone to bias in favour of groups to which they belong, and by implication against the others. That can reinforce existing societal prejudices and make life harder - more expensive policies and more declined claims - for minorities. Is there hope? This article from Daniel Schreiber, CEO & Co-founder at Lemonade explains how he thinks an AI we may never understand can eliminate discrimination and bias in insurance. Of course, I note that he isn't talking about bias in insurer selection - Lemonade is a single insurer offer, not a marketplace. 

Comparing the air quality of cities

Click here to see how the air quality of city you live in compares the most polluted cities in the world. This comparison does not take into account Australia's recent catastrophic bush fires. It is likely that air quality will become an increasingly important issue. It is becoming a political issue in China and India, and I suppose, given recent opinion polls, in Australia too. From a risk management perspective it is a huge concern increasing lung cancer incidence and risk - to name just one example. 

American medical services prices vs global prices

The International Federation of Health Plans published their latest report on the 2017 prices of international medical services. The report illustrated that both patients and insurance companies in the US paid higher prices in comparison to other countries sampled in the report. The 2018 study by Harvard on the things differentiate health systems found that the US is distinct in a number of ways.

Click here to read more

The US is a very high-cost economy and there are dangers of comparing goods that cannot be traded across borders. A good example to remember is that your don't mind paying perhaps fifty times as much as someone in rural China for a haircut, because everything here is pricier. But service costs are becoming increasingly comparable and can be subject to substitution: some people can get their hip replacements done in Thailand, for example. 

Holiday themed data graphic

The OECD has this charming little chart to help put holiday indulgence into perspective. The more analytical of you can assign nationalities to different levels of drinkers at your party. We'll have to invent a new 'country' for non-drinkers. 

Four Japanese rules to live past 100

Okinawa, an island in Japan is the home to the highest concentration of centenarians in the country. Dr Makoto Suzuki from the island has been researching centenarians for the last 40 years and found these four factors together contribute to longevity according to this video.

• diet
• physical activity
• self-help
• mutual help system

Look at that list again. So much that is under the control of an individual, or a small community. Plenty of scope for well-being, longevity, and good health with current resources and technology.

 

 

 

Chatswood premium comparison database v107

A new version of the premium comparison database has been released. The most interesting part of the release is the new 'Price Change History' feature. There is a new button labelled ‘Price Change History’ in the menu - see image below. 

This opens a list of historical price changes, which can be easily searched by Benefit, Company and Date. So, for example, you can see what price changes have been made to Income Protection benefits over time, or the change history for a particular company. 

Reassessing what it means to be old

In comparison to previous years, people in wealthy countries are living for longer. Additionally, people aged over 65 are generally healthier and score higher on cognitive tests. This presents both an opportunity and a challenge for life insurance companies.

Click here to read more

The average Kiwi

The image of a typical New Zealander has been described as a myth, crazy, a cooked idea. Which it is. That doesn't mean it isn't fun. 

New Zealand has a slightly skewed sex ratio (in favour of more women, in contrast to much of Asia which has more men, probably due to some sex selection in the first trimester). So for a long time if you met a New Zealander, they were slightly more likely to be a woman than a man, which gives the lie to the images of the classic 'Kiwi bloke' as being the 'average' - the modal average is female. Carry that process to the extreme and you get the work done by Radio New Zealand, profiled in the video below: Using the 2018 census as a guide, Radio New Zealand put together a description of who the average New Zealander is, and found that:

• She is Pākehā,
• About 37
• Born in New Zealand
• Lives in Auckland
• Has a partner or spouse and lives in a house they own
• She drives a car most days to her full-time job
• Her highest qualification is high school
• She doesn't smoke
• She doesn't believe in any kind of god
• She most likely doesn't have children, but if she does, she's got two

This is slightly different to the average New Zealander from 2013, who:

• Rented
• Believe in a god

If you used mean values instead of modal ones you would come up with an even more ridiculous average. But we shall leave that to you. 

Click here to read more

Cyber Smart Week

Look we found a post about Cyber Smart Week that relates to insurance: AIA's Chief Technology Officer Shane Ohlin has put together this article showing the top 5 tips for being cyber smart. Of course, we all use technology and cloud services and this applies to all of us anyway. In an interesting social trend, 

Here are some other good resources:

• CertNZ have this cyber security quiz you can take to check out how good your cyber security habits are, and then it provides tips to improve your online safety
• The Economist has this piece on why so many people fall for financial scams
• The FMA has this piece on cold-callers with share scams - just to ensure that you don't fall for the idea that all scams are online