Legal and regulatory news for the life and health insurance sector

25 Aug 2020 – NZX decided to halt trading early as it “experienced a volumetric DDoS (distributed denial of service) attack from offshore, which impacted NZX system connectivity.”

26 Aug 2020 - ANZ Investment Services (New Zealand) Ltd announced it will stop accepting new investment into the Bonus Bonds Scheme and, following two further prize draws, will wind up the scheme over the next year.

26 Aug 2020 – RBNZ advised that the Ministry of Health granted an exemption to enable registered banks and licensed non-bank deposit takers to carry out critical financial services at Alert Level 3.

26 Aug 2020 – Stats NZ reported that incomes fell for the first time since records started in 1998.

Treasury economic impact resources for planning purposes

In addition to the recent post on economic commentary, here is the Treasury main page for COVID-19 impacts on the economy and related papers. 

Clients that subscribe to the quarterly life and health review and quarterly market data can expect to get an interim paper on forecasting and planning methodology next week. 

Level Three Trading Update

We are continuing to work in a distributed fashion - all our people will be working from home unless it is absolutely essential to visit the office in order to maintain the maximum social distancing. If you need to contact any of us, me, Fran, Jerusalem, Kelly, or Rob then please email or call our mobiles.

Although, in order to support our local businesses, I will be popping out for a walk to my favourite coffee spot to pick up a takeaway coffee later this morning. 

Some Economic Outlook Resources

Swiss Re's paper offers a good global insight - thanks to Financial Advice New Zealand for picking up on this one. They predict a deep but relatively short recession in comparison to the global financial crisis. "Short" is a relative term, as in many markets worse affected by ours, that recession lasted years. They are worried about inflation due to the massive stimulus being applied to western economies. 

When The Economist wrote this article about the importance of a hedge against sudden inflation (published in January, back when COVID-19 was barely known) I did not really think this was the biggest risk - quite the reverse. It now looks to be wise indeed. 

Tony Alexander's articles provide a view laced with plenty of local data to help bring it all back home to our current situation. He's an optimist, but perhaps not as optimistic as Vittoria Shortt, ASB Bank CEO, who was reported in the NZ Herald as saying that the economy will be back up to about 80% of its capacity in level three - although when you scan her quoted statements in the article they are all more conservative than that. 

The Moniac

Moniac in UK

This is a picture of a Moniac (along with my son Jacob), a hydraulic computer, modelling an economy at a high level. It is a New Zealand cultural and scientific artifact, invented by Bill Phillips. Phillips was a New Zealand economist, but if you read his biography, you discover that before that, he was an adventurer. It is well worth reading about Bill, who was trained largely by observation and had a brilliant, critical mind, unusually coupled with a an inventor's belief in the possible.

This photograph was taken at the science museum in London. But you don't have to travel so far to visit this icon, as there is also one in the Reserve Bank building, in the small museum on the ground floor, which is open to the public. If you have some time between appointments next time you are there I recommend popping in. 

Antibiotic resistance threat to economic stability

Used to treat countless individuals undergoing differing medical treatments, antibiotics can be classified as something that we take for granted. The influx of antimicrobial resistance is amplifying concerns globally. The spread of Candida auris and super-resistant gonorrhoea exemplifies the horrifying reality of antimicrobial resistance. The increased antimicrobial resistance could potentially kill 10 million people over the next thirty years – a 700,000 increase on current deaths directly related to antimicrobial resistance.

As a response to the growing threat, a UN commission has recommended an immediate and well-co-ordinated action plan be implemented and exercised to ensure that we avoid a catastrophic event that would result in dire economic outcomes that the World Bank believes could be equivalent to the global financial crisis of 2008-09.

Although pharmaceutical companies have failed in the past to conjure solutions for pressing medical issues, developments relating to antibiotics have been poor. To restrict antimicrobial resistance doctors often refrain from commonly using novel antibiotics. Novel antibiotics are seen as the last resort and are only used for short periods of time. Unlike other medicines, the price of antibiotics is often set low, giving pharmaceutical companies very minimal motivation to develop their current products further; this has the negative implication of discouraging investors from approaching and potentially working alongside antibiotic firms.

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