Quality Product Research: (Inbuilt) Child Trauma – Part Two 

A reader has queried whether QPR takes the sum insured into account in our Research Ratings.  And the answer is yes, we do consider the amount paid by each insurer. In fact amount paid are a vital part of a value-based assessment approach - and something we capture much better than simple feature lists of benefits do. 

In trauma insurance, some companies pay the full benefit for an item, others only make a payment of 10% or 20% of the sum insured because the condition was not severe enough to warrant a full payment. Our score is varied according to how much would actually be paid. In the scenario for Child Trauma, we have a claims amount of $100,000 and calculate how much would be paid out by each insurer.  

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Furthermore, based on adviser feedback we have corrected our ratings to reflect the fact that Asteron does include the option to convert their child cover to adult trauma at age 21. Interestingly, if the parent is on Trauma Recovery (TR) and considering converting their child cover to TR with Early Trauma they are required to complete an application. 

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Your feedback

We value getting your feedback on how these wordings are being applied to claims you may be aware of. Please email us with details of any recent claims to help us update our understanding. 

Doreen Dutt, Research Analyst, Quality Product Research Limited, researcher@qpresearch.co.nz


Quality Product Research: Proposed rating for Benign Brain and Spine Tumour

Introduction

The World Health Organisation states that 130 different types of brain tumours exist. A benign brain tumour is a non-cancerous growth in a distinct area of the brain. The survival rates for patients with benign brain tumours are higher than others, however this depends on the size and location of the tumour within the brain.

Proposed sub-items

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Notes

There are some noticeable differences between insurers such as whether partials exist, or if the spinal cord or tumour on the pituitary gland is covered. We have tried to make the sub-items clearly demonstrate the variation between insurers.

Why is this important?

Although QPRs weighting of this item is low, it would be of high interest to those that have a family history of brain cancers. With a lot of insurers now having specialised cancer products we would like to ensure that our rating is relevant. 

Your feedback

We value getting your feedback on how these wordings are being applied to claims you may be aware of. Please email us with details of any recent claims to help us update our understanding.

Doreen Dutt, Research Analyst, Quality Product Research Limited, researcher@qpresearch.co.nz


FMA remind advisers to link with FAPs, and more daily news

The FMA has reminded all financial advisers that they must link to the FAP that they are operating under. The FMA has noted that linking on the FSPR is a critical step in the new regime. This step must be completed before advisers provide advice to clients. Advisers that haven’t linked to their FAPs by 16 June 2021 may face deregistration.

“Financial advisers are being reminded to check their Financial Advice Provider has linked to them on the Financial Service Providers Register (FSPR).

This is a critical step under the new financial advice regime and must be completed before advisers offer advice to retail clients.

Advisers not shown as linked to a licensed Financial Advice Provider, or authorised body by 16 June this year may face deregistration if they offer no other services.

You can see full details of how to complete the linking process on the FSPR in this video guide and on the Companies Office website.”

In other news

Fidelity Life: Currently vacant Chief Distribution Officer (CDO) role has been renamed Chief Sales & Service Officer (CSSO). The role will include overseeing the application, renewal and service components of the customer journey.

Fidelity Life: Information on the new commission model and distribution agreements is set to be shared in the near future

Fidelity Life: Advisers are expected to complete their accreditation before June 2021 to continue to work with their agency

Fidelity Life: My Story - David and Cheri

RBNZ: Discussion Paper Advisory: Māori Financial Services Institutions and Arrangements

From LinkedIn: Advisers should lead from the front on climate disclosure


Quotemonster and Advicemonster updates - live now

We have updated the quotemonster site, on Thursday, and made the following items live, for more detail see below:

  1. New SOA report content setting options allow you to create more customisations for your SOAs if you are an Advicemonster subscriber. To access these click settings, then SOA Setting, then Report Content Setting
  1. New SOA template for Need analysis recommendation note pad - bring through all your calculations from the recommendation notepad in Advicemonster to quote and to the SOA.
  1. New nib rates applied to the site
  1. FSP input validation for user setting and register form - so it is important that your FSP number matches your name and the entry on the FSPR. A reminder that sharing your login is a breach of our terms and conditions and unusual account activity (like switching user names) will be picked up and we will be contacting account-holders that actively share their logins. 
  1. Improved the health product breakdown table in the research report.
  1. Applied Fidelity level standalone trauma maximum level term rule
  1. Changed Partners Life IP and MP max-age to 57 - as we do not quote reduced commission versions of income protection
  1. Update Web version number to v 3.8.7

Congratulations to Albert, Doreen, and the whole team on a big package of updates. Our special thanks to the advisers sending us issues and suggestions for improvement of the Advicemonster process and the SOAs. 


Fidelity Life looking to improve legacy systems, and more daily news

Fidelity Life CEO Melissa Cantell has said the insurer is looking to improve current legacy systems to ensure a seamless process for advisers. Cantell has said that legacy systems are not equipped with the technology to meet business and customer needs. Cantell notes that although they have a lot of information, there is no way of extracting useful insights. To minimise manual work for employees and to improve adviser interactions, Fidelity Life is looking to introduce a new core platform later this year. Fidelity Life has been working on the new platform for the last few years. The majority of Fidelity Life’s business will be moved to the new platform. The change is expected to change the way Fidelity Life works with advisers. Internal and external trials of the new platform have been positive.

“Research has shown repeatedly that New Zealanders who get financial advice end up better off. However, poor legacy systems have often been a pain point for advisers dealing with insurers - something which Fidelity Life CEO Melissa Cantell said her company is looking to change quickly.

“My experience of many industries is that everyone has a technology challenge in some way, shape or form, but insurance and financial services seems to have more than many,” Cantell commented.

“There are many old legacy systems that were not built with today’s businesses or customers in mind, and we’re not any different to anyone else.”

“The old systems are just not fit for purpose any more, and they’re hard to get data out of - we’ve got so much information, but the insights just aren’t there because it’s so hard to get it out,” she explained.

“It’s hard for our people to work with lots of manual processes, which means more time handling process and less time helping customers. Then you have our advisers who are trying to connect with us, and it’s imperfect because our world isn’t great, and theirs is somewhere on their own spectrum.”

Fidelity Life is looking to roll out a new technology platform from the middle of this year - something Cantell said has been a significant project for the insurer for a number of years now, and will allow advisers to work with Fidelity Life on a ‘whole other level.’

“We have a new core platform which will have us migrating a big chunk of our business on to a brand new, clean, built-for-us platform,” Cantell said. “We’re moving everything across, and our entire on-sale book will be on that new platform.”

“It has many components to it, but one of the things we’re particularly excited about is our new adviser portal,” she added.

“The way our advisers work with us will be on a whole other level than it is now. Once that’s there and we’re clean, tidy and not managing the complexity of our own internal systems, we’ll start to think about what else we can do beyond that.

“We’ve already piloted the platform on part of our business internally and externally, and it’s all been going well, so we’ll soon be turning it on for everything.” Click here to read more

In other news

From Good Returns: Trust tax disclosure changes: What advisers need to know

Fidelity Life: NZ's largest locally owned life insurer champions adviser learning and good outcomes for customers

Professional IQ: Jail time for breaching NZ's cartel laws from April 2021 - what you need to know

Southern Cross: Head of Adviser Networks, Ryan Koppens says Southern Cross is looking to enhance adviser referral pathways


Partners Life announce new commission payment system, and more daily news

Partners Life has announced that they expect to implement a new commission payment system on 29 March. Although the payment system is set to be updated, commission processing and calculations will remain unchanged. The change will affect the format of commission statements. From 29 March, commission statements will be made up of a commission statement, a transaction list, and a buyer-created tax invoice and credit note if advisers are GST registered.

The first section of the statement will include summaries of all daily transactions. This will include credited and debited commission, applicable taxes, and amounts paid to bank accounts. The second section will focus on breaking down commission payments by policy number, client name, annual premium income, and commission type. The third section will highlight the policy number, client name, API of the policy, total commission paid, non-life portion of the commission paid and the GST added or deducted on non-life commission. GST registered advisers will have access to a buyer created tax invoice/credit note. Partners Life has said that it is more practical to calculate the GST on non-life commissions as they have access to the information required to perform the GST calculation.

“Partners Life is implementing a new commission payment system. We expect the new commission payment system to be live on 29 March 2021. Commission processing and calculations will remain the same, the only change you will notice is the improved format of our commission statements.

The new commission statements now contain three separate sections:

  • Commission statement
  • Transaction list
  • Buyer-created tax invoice/credit note (if you are GST registered)

The first section of your commission statement is a summary of all transactions for the day. This will clearly outline the total of each type of commission credited or debited, applicable taxes added or deducted, and total amount paid to your bank account.

In addition to the above, the commission run number will change. Instead of the commission run number increasing by one for every run, the new run number will be the date of the commission payment. For example, the commission run number for Monday 29 March 2021 will be 20210329 (e.g. YEAR/MONTH/DAY).

The second section of your commission statement is the transaction list. This will provide a breakdown for all commission payments by policy number, client name, annual premium income, the type of commission paid per policy and the amount.

The third section of your commission statement is a buyer-created tax invoice/credit note for GST purposes. The buyer created tax invoice/credit note will state the policy number, client name, API of the policy, total commission paid, non-life portion of the commission paid and the GST added/deducted on non-life commission. If you are GST registered, we will provide you with a buyer created tax invoice/credit note. We believe it is more practical for us to calculate the GST on non-life commissions as we have access to all the information required to perform the GST calculation. By receiving the buyer-created tax invoice/credit note, and continuing to sell our products, you agree not to issue a tax invoice for the commission earned and you also agree to inform us if your GST registration status changes.”

In other news

Fidelity Life: Adrian Riminton to be new Chief Risk Officer from 1 April 2021

FMA: James Greig to lead FMA monitoring of new regime


Interrupted: FSC Get in Shape Conference rescheduled plus more daily news

The FSC has announced that the Christchurch and Dunedin Get in Shape summits will go ahead on 14 and 15 April 2020. The second half of the summit was interrupted due to changes in COVID-19 alert levels. Similar to the Auckland and Wellington summits, the upcoming summits will include a masterclass session. Click here to register

“The two Get in Shape Advice Summits that were postponed in February due to Covid-19 alert levels have been reorganised on 14 April 2021 in Christchurch and 15 April 2021 in Dunedin.

The sessions, including the 2021 Masterclass are all designed to help and support the community to grow and adapt, following the start of the new FSLAA regime this week.

If you missed out on our Auckland and Wellington events, tickets are still available for both the Christchurch and Dunedin events. Find out more information and register.

Those already registered for the postponed events will have received an email and text with a link to the updated tickets automatically transferred to the new dates.”

In other news

Fidelity Life: new adviser portal set to go live in July

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Insurance People: Katrina Church asks: Should the government be encouraging the public to seek advice?

Sorted: Tom Hartmann writes: This is what good advice looks like


Fidelity Life announce customer research, and more daily news

Fidelity Life has announced that it will be conducting customer research on new products and potential service improvements through Qualtrics. The research is intended to understand what is working and what isn’t. Fidelity Life has revealed that new advisers have already been involved in the research. More advisers will be utilised in future research.

“We’ll shortly be kicking off some research with customers about new product ideas and service improvements with the aim of finding out what they like, so we can do more of it, and what they don’t like, so we can make improvements. Don’t worry, we won’t be bombarding them!

As valued distribution partners, we’re keen to involve you along the way. The insights will not only support how we shape our products to better meet the needs of the market but will also provide us with valuable data on their preferences when it comes to customer experience.

From time to time we’ll share a summary of the findings with you, and hope you’ll find them valuable in supporting your interactions with customers and improve their overall experience with Fidelity Life.

We’ve already experimented in engaging a few advisers in this research so we can enhance your experience and improve the way in which we work with you. We intend to do more of this in the future too, more on that to come.

We’re working with a trusted and established partner in this space and using their survey platform – Qualtrics. If you have any questions, please feel free to get in touch”

In other news

From Stuff: Waiting in Pain: People without money and insurance the ones who suffer - a particularly valuable piece updating us on the situation with waiting lists and the process before that, even to get properly diagnosed. A powerful argument for having a plan and having insurance. 

FMA: March 2021 – A new financial advice regime begins for New Zealand


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