Fighting obesity and saving lives

With a growing issue of child obesity, the Chilean Government implemented several preventative measures in 2016. The government:

  • Banned advertising unhealthy foods to children
  • Prohibited unhealthy foods being sold in and around schools
  • Included bold labels on packaging

The new regime increased consumer awareness, ensured that Chile reduced the number of premature deaths that occurred each year as a result of obesity as well as ensuring that national healthcare costs wouldn’t skyrocket as a result the increased rate of obesity.

I am not sure if Chile's policy decisions are the right ones, but it is a challenge to us to consider what we need to do. New Zealand has a problem with obesity. Compared to Chile, our situation is much worse. Chile is about the 60th most obese country with an average BMI of 26.8, compared to New Zealand at 28th most obese country with an average BMI of 27.9. Although obesity is listed as only the fifth largest cause of deaths by risk factor (see below) it is also strongly correlated with high blood pressure and high blood sugar - often diet being a common cause of all three. 

Click here to read more


Bowel cancer is killing 1,200 Kiwis a year

Accuro are offering free bowel screening kits to members to assist in early detection of the disease, with their acting CEO Gavin Rutherford saying "The problem is that many insurers do not engage with their members until after they have been diagnosed,"

Currently NZ's National Bowel Screening Programme aim to invite 700,00 people for free bowel screening by June 2021, but it is limited to those aged 60 - 74.

Click here to read more. 

The industry, versus companies in the industry

The New Zealand Herald coverage of RBNZ research and recent media releases reminds me of one of my favourite jokes about economists:

Three economists are taking a day off at the archery range. Being largely desk-based folks they aren't very good, but they're having fun. One draws their longbow shakily, aims, shoots, and misses the target by a metre to the left. The next draws their bow with effort, aims to the right, shoots, and misses the target by a metre to the right...
...the third economist then shouts "bulls-eye". 

So when a report worries about both high levels of profitability (applicable to some companies) and lower solvency margin (applicable to different companies) and the media reports about both talking about 'the industry' it is this use of an 'average' that is confusing for readers. How can the sector make too much money and run down solvency capital? It doesn't. Some companies have low margin businesses and tend to have falling margins of capital above minimums and others have big margins and have stable or rising levels of capital. The story is different for each company.  

The question of insurer efficiency, and in aggregate insurance industry efficiency, is an important one. It is complicated too. Unpacking it is hard and unlikely to be done in consumer-focused articles. Take just one issue: underwriting information. Major gains in insurer efficiency could be made is access to medical information, much like banking information, could be made more available at the discretion of each customer. If permission were granted to access ministry of health databases the results could make underwriting so much easier, and therefore quicker, and cheaper. It could be convenient, fast, and accurate. Usually we only get one, or sometimes two, of those three. But when the question of enhanced access to medical information is raised, even if that were controlled by the customer, the reaction from media is usually negative. So we are stuck with memory-test questionnaires that place disclosure burdens most heavily on the customer. 

FSC Launches new insurance research

The Financial Services Council has launched new insurance research highlighting the gap between typical and ideal cover levels and some significant challenges facing the industry in lifting consumer engagement.

In the media release the CEO of the FSC, Richard Klipin, highlighted the purpose and key findings: 

The study looked at the three main types of life insurance available in New Zealand; life insurance, income protection/mortgage repayment insurance and critical illness insurance. “While 54% of those surveyed agree that it is important to have the right amount of insurance to cover risks including illness, death and job loss; estimates of underinsurance are much higher,” continued Klipin. Critical illness showed the highest level of underinsurance with only an estimated 9% of Kiwi’s being sufficiently insured, followed by 11% who had adequate income protection/mortgage repayment insurance and 29% with adequate life insurance.

Consumer views are included in this introductory video: 


Gambling on life 2020-01-22 164052

The research can be viewed here

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. 

Air pollution