Decrease in Australian adviser numbers related to increased lapse rates, and more daily news

Australian consultancy firm NMG Consulting was commissioned to review different aspects of the Australian life insurance industry. The report found that the decrease in adviser numbers, advisers shifting their attention to higher value customers along with more frequent reviews will mean that within the next three years, cover will be offered to less than 15% of the financially active population. The report noted that research backed the expectation that the industry shrinking would result in an increase in lapse rates as access to financial advice would reduce. It was stated that there is an increase in partial lapses and a sharp decrease in re-broking. The decrease in re-broking means affordability pressures on clients trying to keep their policies. The report suggests that prices are likely to increases and risks pools are likely to shrink as a result of reduced access to financial advice.

“The ongoing decline in total number of advisers, combined with the rational adviser shift to focus on fewer, higher value customers and more frequent reviews will reduce coverage to less than 15% of the financially active population within 3 years. The focus will be the top-tier 200 – 300 consumers with a three year or shorter review cycle. This implies a highly productive, sustainable and high quality ‘best advice’ model, that narrowly supports informed decisions by only the wealthiest and most financially sophisticated 10% - 15% of the population (with a resulting skew to older ages/more complex cases).

Research supports expectations that the contraction in the advice market will lead to an increase in lapse rates as customer access to advice reduces. Partial lapses and the rate of lapsing out of the system has increased. The sharp decline in re-broking is leading to increasing affordability pressure on customers who try to ‘hang on’ and then lapse out altogether, as opposed to an advised glide path to retirement with benefit and affordability aligned to need.

It should be noted that of the 25% of Australians aged 25 – 35 (predominantly middle income, with children or non-working spouses) who have less insurance than the community standard, almost one in five has not been able to access financial advice.

These trends suggest that future risks to the life insurance market are likely to relate to lack of access to the advice system and sustainability due to shrinking risk pools driving up prices and reinforcing the adverse selection spiral. Regulatory reforms need to both protect Australian consumers whilst making sure they can access an affordable advice system; while ensuring life insurance is sustainable over the longer term. Otherwise the pattern of under-insurance among young and middle-aged Australians, and the over-insurance of older Australians due to lack of access to advice, is likely to get worse at least over the next three years.”

 

In other news

Fidelity Life: Ross Fowler from Wealth Protection in Christchurch awarded the Gordon Watson trophy 

Fidelity Life: Brett and Niki Stonham from Stonham and Co in Auckland awarded the Cary Veenhof Service award 

Fidelity Life: Joey Gregory from Discovery Financial in Auckland awarded the Emerging Adviser of the Year award 

Fidelity Life: Chris Aynsley from Aynsley and Associates from Canterbury awarded the Fidelity Life trophy


Fidelity Life customer engagement initiative, and more daily news  

Fidelity Life has announced that the customer engagement initiative will go ahead this year. The initiative is based on customer feedback via a net promoter score (NPS). In September 30 advisers with the highest NPS and their partners will travel to Hawkes Bay where the winning adviser will be awarded the Cary Veenhof Trophy. Advisers and FAPs will be rated. For advisers, scores will be allocated based on feedback on their service. FAPs will be scored on the feedback of advisers within the FAP.

 

“After the success of our inaugural Customer Engagement initiative, we’re gearing up to do it all again!

 

The initiative involves getting customer feedback on adviser businesses using Net Promoter Score (or NPS) and celebrating the top performers.

 

This year the 30 top scoring advisers and their partners will travel to the mighty Hawkes Bay where the winner of the Cary Veenhof Trophy will be announced.

 

Travel is 22-24 September 2021 and there's two ways to register:

 

Financial adviser (FA) – calculated based solely on feedback of your individual service.

Financial advice provider (FAP) – calculated based on aggregated feedback on all individual FAs within your FAP. Any Individual FA’s who register in their own right will be excluded from these metrics.” Click here to register

 

In other news

 

TAP: In the past two weeks 11 new advisers have been working through TAP’s adviser academy

Financial Advice: Financial Advice has reported that 400 financial advisers have achieved the Trusted Adviser mark

FMA: Adviser, Licensing role currently being advertised


nib health management programmes, and more daily news

As part of their well care approach, nib has provided insights into health initiatives and pilot programmes. The free Health Management Programmes are intended to offer members support in managing their health and offering expert advice from nib Wellness Coaches. Health Management Programmes include:

  • Healthier Joints Pain Management programme
  • nib Healthier Heart
  • nib Cancer Care
  • nib Healthier Joints Weight Management

“The impact of long-term health conditions can take a toll on not only physical wellbeing, but mental wellbeing too. That’s why we offer our range of free Health Management Programmes, to support our members in proactively managing their health conditions (aiming to reduce the need for invasive medical procedures) while providing expert support and advice from an nib Wellness Coach, every step of the way. 

Our nib Healthier Joints Pain Management programme, for example, covers 9-12 weeks of rehabilitation and helps members effectively manage their pain and symptoms, while also increasing strength and mobility through personalised activity plans.

Other nib Health Management Programmes available to members who meet selection criteria include: nib Healthier Heart, nib Cancer Care and nib Healthier Joints Weight Management.”

Another programme dedicated to bettering the health of members is the Bowel Screening Programme. Through a partnership with MercyAscot, nib offers screening kits to members identified as being at higher risk of developing bowel cancer. The initial screening was offered to Auckland Māori and Pacific Islander members between 45-75 years and other Auckland members aged 55-75 years. More screen is set to begin in March. 

“Bowel cancer is the second highest cause of cancer death in the country, but there’s a great chance of beating it if detected early. To support our members who are at higher risk of developing bowel cancer, we partnered with MercyAscot to deliver our bowel screening programme. 

The programme offers free bowel screening kits to eligible members, so they can easily complete it at home and send back for testing. If needed, members receive priority access to diagnostics, specialists and treatment. They can also receive individualised one-on-one health coaching before and after treatment. 

The pilot was offered to Auckland-based members aged 55-75 years (45-75 years for Māori and Pacific Islanders). Abnormalities were found in two members results, however, early detection has allowed MercyAscot to arrange further screening and treatment. 

Wave two of the programme will commence in March.”

The partnership with Tend allows Auckland members access to GPs through the phone and through an app. Nib offering pilot subscription for eligible members. Members will have: 

  • unlimited access to consultations for a year
  • free repeat prescriptions
  • one influenza vaccination
  • annual health check

“We’ve teamed up with Tend, an innovative and convenient healthcare solution, so we can help members see a doctor all from the comfort of their phone. Eligible Auckland-based members will have access to trusted medical advice quickly and easily through Tend’s online (in-app) appointments, secure messaging or at their in-person clinic in Kingsland if preferred. Tend’s team of experienced doctors and nurses are committed to understanding individual member needs. 

As part of our exclusive partnership, we’re rolling out a pilot subscription for eligible members, offering unlimited GP consultations for 12 months, free repeat prescriptions, one influenza vaccination and an annual health check.”

In other news:

Fidelity Life: Senior Product Manager role being advertised

Fidelity Life: Risk and Compliance Advisor - Reporting and Analytics role being advertised

RBNZ: Shares fall as investors call RBNZ's bluff


Insight into FSPR usage, and more daily news

MBIE has published a document covering adviser and FAP responsibilities under the new regime. The document first sets out the rules of engagement, stating that every adviser must be engaged or linked to a FAP. Advisers must ensure the FAP registers the engagement on the FSPR. But to link to FAPs, advisers must first provide the FAP with their name and FSP number.

 From 15 March, advisers must have these things before linking to a FAP:

  1. A RealMe® login
  2. An online services account with the FSPR
  3. Authority to update records on behalf of the financial advice provider

In order for advisers and FAPs to engage, FAPs must:

  1. Log in to your online services account using your RealMe ID and password, and locate your registration in the ‘FSP Registrations’ tab of your dashboard.
  2. On the ‘View FSP details’ screen, select the ‘Financial Services’ tab and click the ‘Maintain Financial Services’ button.
  3. Scroll down to the ‘Financial advice service’ where you’ll see the FAs, if any, that you’re linked to.
  4. Click the ‘Add Financial Adviser’ button and search for the FA you wish to engage, using their FSP number or name. Select the FA from the drop-down list, and indicate whether or not they will be covered by your dispute resolution scheme (DRS).
  5. Repeat step 4 above for each new financial adviser you add. Please note, multiple advisers are displayed alphabetically. (Cont.)
  6. When you’ve finished updating your registration, click on ‘Next Step: Declaration’. Review and confirm the declaration.
  7. Click on ‘Next Step: Review’. Review the information you have entered and tick the check box to confirm the information is true and accurate
  8. Click on the ‘Submit’ button at the bottom right of the screen.
  9. Viewing the FAPs financial services, you’ll see that the FAs now appear on the ‘Financial Services’ tab.

To support the new regime being implemented, the FSPR will also be updated. The Companies Office will release guidelines and videos to help users closer to the date.

This video shows the engagement process.

In other news

Fidelity Life: Dan Wilkinson joined Datacom #RightCloud panel

Cigna: Multi-Benefit Discount promotion that applies a discount up to 7% on Life Cover or Life Income Cover with an additional benefit is set to end February 28, 2021

Partners Life: Is data the key to understanding underinsurance?


nib strategic thinking shift, and more daily news

nib New Zealand CEO Rob Hennin outlined the company’s shift in strategic thinking. Instead of focusing on ‘sick care’ nib will be focused on ‘well care’. Hennin noted that COVID-19 has meant that health insurers are more determined to promote healthy living, community connection and mental health. Hennin states that nib’s core focus and strategy remains unchanged although financial protection is no longer the sole focus. nib is set to follow a more holistic approach when viewing the health journeys of members. Choosing to take a long-term approach will mean that nib will work towards empowering members to make healthier choices.

“As insurers across the country put their 2021 strategies into action, nib New Zealand CEO Rob Hennin says that for him, this year will be all about focusing on ‘well care’ rather than ‘sick care,’ and looking beyond the mindset of an insurer focusing purely on financial protection.

Hennin says that with COVID-19 having changed everybody’s lives on such a huge scale, it is more important than ever for health insurers to promote community connection, wellness, and a focus on mental health. He says nib’s core strategy remains fundamentally unchanged, but that there will be much higher focus on mental health, and on supporting members’ health journeys.

“COVID has clearly disrupted our lives and our business in unforeseeable ways,” Hennin said.

“Our strategy is very clear - we’re looking to protect our members, offer them the financial cover that they need, connect them with providers who can help with specific needs, and to help them to navigate the healthcare system that we have in New Zealand.

“We also want to empower them to make the health decisions that will put them on track to achieving what they want to achieve, and that part of our strategy is very much unchanged.”

Hennin says the company will be looking to take a more “holistic view” of people’s health journeys, and to take a “long term approach” to helping them access the care that they need. Click here to read more

In other news

Fidelity Life: Apollo, eApp and Adviser Centre set to be improved to better customer experience - no further details announced yet

Fidelity Life: Fidelity Life announced that they will be introducing a new commission framework - no further details announced yet

From Goodreturns: Predictions for 2021 – from the Laird’s Desk

Southern Cross Travel Insurance: Southern Cross Travel Insurance awarded WriteMark for new 'plain language' domestic policy


Fidelity Life on understanding compliance, and more daily news

Fidelity Life has compiled information relating to the FMC Act and the obligations of advisers. The information is displayed in a one page document that outlines the compliance expectations of advisers and FAPs. A list of standard conditions of licensing, code of professional conduct for financial advice services, and disclosers are included.

Screen Shot 2021-01-27 at 12.26.04 PM

In other news

Fidelity Life: A- financial strength rating has been reaffirmed for the 25th consecutive year

Fidelity Life: North Island Accreditation workshops to commence. Workshops will help advisers get parts 1 and 2 of accreditation.

Wealthpoint: Broker Manager (Senior General Insurance Broker) advertised


RBNZ addresses data breach, and more daily news

The Reserve Bank has announced that it will continue to respond to the external breach of an information sharing service. Adrian Orr has said that the RBNZ has contained the breach and is now working to understand the impact of the breach, this includes working with both domestic and international cyber security experts. It has been noted that the breach wasn’t an attack on RBNZ or other users of the information sharing service. RBNZ has said that it cannot offer more details at this time.

“The Reserve Bank of New Zealand – Te Pūtea Matua continues to respond with urgency to a breach of a third party file sharing service used to share information with external stakeholders.

Governor Adrian Orr says the breach is contained, but it will take time to determine the impact. The analysis of the potentially affected information is being done with pace and care.

“We are actively working with domestic and international cyber security experts and other relevant authorities as part of our investigation. This includes the GCSB’s National Cyber Security Centre which has been notified and is providing guidance and advice.”

“We have been advised by the third party provider that this wasn’t a specific attack on the Reserve Bank, and other users of the file sharing application were also compromised.”

“We recognise the public interest in this incident however we are not in a position to provide further details at this time.”

Providing any further details at this early stage could adversely affect the investigation and the steps being taken to mitigate the breach. The Reserve Bank will continue to work with affected stakeholders directly.” Click here to read more

In other news:

Partners Life: Braden McMahon announced as new participant in the Legacy Leavers video series

Fidelity Life: 9-month fixed term Senior Project Manager role advertised in December

Gen Re: Medical Underwriting Programme set to become digital from 1 March 2021

Montoux: Customer Delivery Lead (Life Insurtech) role advertised

Accuro: appointed Director role advertised


Fidelity Life set to end Sharecare partnership, and more daily news

Fidelity Life has announced that it will be ending its Sharecare partnership. This change has been a result of COVID-19 affecting progress. Sharecare will continue to be available to existing users until 31 December 2020 although new challenges and other content won’t be available. All users will be contacted by Sharecare before the end of the year to discuss the next steps.

While the app (and desktop version) are no longer available for new users through Fidelity Life, existing users can continue using Sharecare until 31 December - though there won’t be any new New Zealand content, including Challenges.

Sharecare will contact all registered users again before the end of the year regarding next steps beyond 31 December. 

 Ultimately, the economic impacts of Covid-19 have meant we haven’t been able to make the progress we’d originally planned for."

 In other news


Fidelity Life wins top culture award, and more daily news

The Technology team at Fidelity Life was awarded the Best ICT Team Culture award at the 2020 CIO Awards. Dan Wilkinson, Chief Technology Officer, has said that the award is a reflection of the team’s strong culture. Wilkinson noted that culture was the first thing Fidelity Life invested in when beginning its transformation journey. Fidelity Life has said the award represents the five-year transformation strategy in place.

“Fidelity Life’s Technology team, led by Chief Technology Officer Dan Wilkinson, was presented with the Best ICT Team Culture award at the 2020 CIO Awards, a celebration of the best of the best from New Zealand’s technology community.

Dan says the award reflects a strong, above-the-line culture right across the business.

“Our culture is the foundation for every single thing we do at Fidelity Life. It was the first thing we invested in when we started our transformation journey and it’s what gets our people out of bed every day to do the amazing things we do.

“When your culture and strategy are aligned, you will win”, says Dan.

The award represents further progress on Fidelity Life’s bold five-year transformation strategy, which is built on the idea of reimagining life insurance for New Zealanders and aims to deliver sustainable growth.

Key transformation projects include Project Watson, a $25 million investment in a new technology platform due for completion in the second half of 2021; and moving to a brand new 6-star rated green building in Auckland’s Fanshawe Street planned for September 2021.”

In other news

From Insurance Business Mag: Is it OK to give clients gifts?

RBNZ: Reserve Bank Response To Letter From Minister Of Finance


Southern Cross awarded gold for COVID-19 response, and more daily news

Southern Cross has been awarded gold in Reader’s Digest Quality Service Awards in the health and travel insurance categories for the support offered to members during the pandemic.  This is the fourth consecutive that Southern Cross has be awarded gold in the Reader’s Digest Quality Service Awards health insurance category and second consecutive year that it has been awarded gold in the travel insurance category. Southern Cross has credited it’s focus on supporting members during the pandemic as the main reason for being awarded gold.

“Southern Cross has been recognised for the way it has supported customers during an extraordinary year by winning gold in both the health and travel insurance categories in the Reader’s Digest Quality Service Awards.

The awards are facilitated every year to determine which New Zealand organisations have delivered the most outstanding customer service. Consumers rate organisations on personalisation, understanding, simplicity and satisfaction.

This is the fourth consecutive gold for Southern Cross Health Insurance (SCHI) and the second in a row for Southern Cross Travel Insurance (SCTI). Both organisations come under the Southern Cross brand, and are businesses united by a not-for-profit ethos helping Kiwis look after their health and wellbeing.

Southern Cross maintained this award-winning customer service throughout the pandemic by focusing its efforts on supporting customers in ways that would have the most impact.”

Louise Waterson, Editor-in-Chief of Reader’s Digest, noted that challenges faced in 2020 reflect the importance of focusing on customer service. Waterson said Southern Cross achieved excellent customer service.

“Louise Waterson, Editor-in-Chief of Reader’s Digest, said the challenges of this year have highlighted the importance of delivering excellent service to customers.

“For another year, Southern Cross has achieved such excellence, and continues to raise the benchmark of what outcomes customers of health and travel insurance can expect. Only the highest standards will do when fulfilling the health and travel needs and concerns of their customers and their families. New Zealanders appreciate the skill, professionalism and compassion shown by Southern Cross – all of which makes for a winning business strategy. Congratulations,” she said.”

In other news

FMA: Guide for providers of Financial Advice Services – an introduction to Full Licence requirements

From NZ Herald: Son of killer Kiwi dad Rowan Baxter who murdered wife Hannah, 3 kids is suing her parents - as a substantial life insurance payment is disputed due to intestacy

Fidelity Life: Fidelity Life is urging advisers to complete the licensing questionnaire before the end of November to ensure new business is accepted and commission is paid