Partners Life on possible implications of not getting vaccinated, and more daily news

Partners Life Managing Director Naomi Ballantyne has discussed the possible implications of customers choosing not to get vaccinated. Ballantyne highlighted the different actions insurers could take, including applying specific exclusions for unvaccinated customers or choosing to refuse to offer cover. Ballantyne argues that customers with pre-existing conditions that choose to remain unvaccinated are more likely to claim and that insurers have a responsibility to decide how to manage the increased risk.

“Partners Life managing director Naomi Ballantyne says since the personal insurance industry relies on medical science and statistical evidence to design its policies and premiums it stands to reason that the unvaccinated, especially those with underlying medical conditions, present a higher risk to insurers than those who have had their jabs.

"To avoid all clients having to pay increased premiums to address this Covid-related increased claims risk, life insurers have several options," she says.

"They can price differently for vaccinated applicants versus unvaccinated applicants to reflect the different risk profiles.

"They can apply specific exclusions to unvaccinated lives to avoid the increased claims risk arising from potential Covid-19 (and variants) infection, or they can decline to offer cover altogether if they believe a combination of pre-existing health conditions and the unvaccinated status of an applicant would give rise to an unquantifiable increased risk of claims."

She says medical science has evolved significantly improving health outcomes across the globe and a large part of this is due to the advent of vaccines.

"We see the development of Covid-19 vaccines as simply the next step in this development and we trust in the long-established medical science behind it.

"The data tells us there is no statistically significant risk to claims incidence or duration rates arising from complications of Covid-19 vaccinations.

"The same global data demonstrates statistically significant medical complication rates arising from infection with Covid-19 (and variants) in those who do not have any immunity to the virus through vaccination or previous infection."

"In other words, pre-existing issues such as diabetes, heart disease, kidney disease etc are much more likely to result in a claimable outcome if the client is not vaccinated and subsequently contracts Covid-19 (or variants), compared with our normal claim estimations."

She says unvaccinated people have made a personal decision to accept the increased risk and life insurers have a decision to make about whether and how they might accept and accommodate that risk.” Click here to read more

In our business, we feel much the same way, and encourage everyone to get vaccinated if they are able and eligible. We also commend to you the article by Gen Re on the impact of diabetes on mental health.

 

In other news

Cigna: Peter Mensah has joined Cigna as a Business Partnership Manager

Cigna: Cigna Live will be held on 24 November at 10am

Cigna: everyone that registers for Cigna Live goes into the draw to win one of three Christmas hampers

GenRe: The Impact of Diabetes on Mental Health


Massey University announce Financial Capability Practitioners certificate, and more daily news

Massey University has announced the launch of the microcredit certificate for Financial Capability Practitioners (level 5). The course was created by Massey University’s NZ Financial Education and Research Centre (Fin-Ed Centre) and will be delivered by the Research Centre. Those that successfully complete the course will be provided with a Massey University Financial Capability Practitioner 10 credit micro-credit certificate. This can be go towards an individual’s on-going CPD requirement. The micro-credit requires individuals to undertake 100 hours of allocated learning and practice time.

Learning outcomes include:

  • Understanding national and international trends in financial capability and wellbeing
  • Current practices and models for delivery of financial capability
  • Ways to review clients’ current capability and progress during the course
  • How to apply principles of adult learning in the practice of developing financial capability
  • A model for embedding financial capability in current practice vs traditional ‘bolted on’ model
  • Personal financial management techniques and skills to facilitating learning about them.

Click here to find out more

In other news

Partners Life: Financial Security Questionnaires no longer required

Fidelity Life: Melissa Cantell - more than meets the eye

Asteron Life: Three insurances to consider when you start a business

Gen Re: A Mental Health Claims Dialogue

Fidelity Life: Senior Product Manager role advertised

nib: Protect, Connect & Empower Seminar Series to be held June 22, 2021—July 9, 2021

Fidelity Life: research insights 

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Asteron Life simplifies policy transfers, and more daily news

Asteron Life has announced that policy transfer between advisers or to FAPs is now simplified. Advisers will no longer need to complete specific forms or send through a copy of the Sale & Purchase Agreement. Instead, advisers will need to inform their BDM who the seller and purchaser are, when the transfer will happen, and whether it is a full or partial transfer of policies. Asteron Life will send a Notice of Transfer for both parties to sign and return.  Asteron Life has highlighted that all transfer requests need pre-approval. The pre-approval will be issued when an adviser states their intention to transfer policies.

“We have simplified our process for transferring client policies to another adviser or FAP. Our new process means there are no specific forms for you to complete, and no need to send us a copy of the Sale & Purchase Agreement between the two parties. Please discard any existing Sale & Purchase or client transfer forms you might have on file, as these will no longer be accepted. 

Going forward, you only need to contact your Business Development Manager/Consultant with the following information:

  • who the two parties are (seller and purchaser);
  • when the transfer is to happen (minimum of 7 days’ notice required);
  • whether or not you are transferring all of your client portfolio or only some specific clients (in which case you’ll need to tell us their full name and policy numbers).

We will then send you a Notice of Transfer for both parties to sign and return to us to action. 

A reminder that all transfer requests do need our pre-approval. We can confirm our approval when you first advise us of your intention to sell/transfer clients to another Adviser/FAP.”

In other news

ASB: Head of Financial Advice Competency

Vahry Insurance: Julia Vahry has been selected in New Zealand as one of the most outstanding young professionals

Accuro: Accuro is celebrating its 50th anniversary

Gen Re: Finding a Way Forward for Disability Income Insurance in Australia - Considering the Financial Aspects of Product, Underwriting and Claims [Part 4 of series]


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


Implications of mental health on insurance, and more daily news

In his piece Dr. Chris Ball credits information being released by some insurers for the spike in media coverage of mental health issues. Insurer publications imply that mental health issues have reached epidemic levels. The article questions the credibility of the claims highlighting the increase in antidepressant prescription rates while citing a study that found the growth of adult mental illness to be minimal. With the increased rates of mental health issues being credited to demographic changes. The article highlights that the American Psychiatric Association view on mental health causes an issue with insurance companies. Insurers depending on medical models to frame products means applicants will need their mental health issue labelled in the early stage of their application process so that underwriters have a simplified way of assessing circumstances. Dr. Ball notes that the medical studies insurers refer to are usually not representative meaning that the assessment is unfair for applicants. Dr. Ball indicates that mental health issues requires a deep contextual understanding.

“Mental health has become a big topic of discussion in the media. Headlines describing mental health problems at epidemic levels are common - and many come from “research” cited by insurers. We know antidepressant prescription rates have doubled in high income countries over the millennium, to the extent that over 10% of the population in the U. S. and Australia take these drugs. So, is there really an epidemic of mental illness?

Toshi Furukawa, Professor of Clinical Epidemiology at the University of Kyoto, upbraided popular writers for “touting such sensational words like ‘epidemic’, ‘plague’ or ‘pandemic’”.1 A systematic review by Richter et al. concluded that the prevalence increase in adult mental illness is actually small and that it was mainly related to demographic changes.2 This is a view supported by Harvey Whiteford, Professor of Population Mental Health at the University of Queensland, who was quoted as saying, “There is no epidemic of mental illness sweeping the world…survey data which has tracked over time shows that the prevalence hasn’t changed - it’s flatlined.”3

DSM-5, the diagnostic manual from the American Psychiatric Association, states, “People are negatively affected by the continued and continuous medicalisation of natural and normal responses to their experiences; responses which have distressing consequences but do not reflect illnesses so much as normal individual variation”. This creates difficulties for the insurance industry, because it largely relies on a medical model to support its products, particularly in Disability Income (DI).

When an episode of psychological distress is disclosed by an insurance applicant, finding the right label for it is always an early step in the assessment process. At one level, a simple solution for the underwriter could be to continue with the medical model and rate for a diagnosis or any small indication of a diagnosis, lumping all psychological distress together.

When an episode of psychological distress is disclosed by an insurance applicant, finding the right label for it is always an early step in the assessment process. At one level, a simple solution for the underwriter could be to continue with the medical model and rate for a diagnosis or any small indication of a diagnosis, lumping all psychological distress together.

However, the outcomes of these disorders are strongly influenced by studies that mostly follow small samples of patients who encountered secondary care services because of the severity of their illness. These groups are rarely representative of the overall population, not adjusted for physical disorders, followed up for relatively short times and subject to publication bias. Including only these patients substantially over-estimates both all-cause mortality and suicide risk.

Clearly, this approach to risk assessment appears unfair to people who have experienced episodes of psychological distress but whose risk is low or the same as the general population. The situation is rather different in DI where mental health claims are common and perceived as prolonged and difficult to manage. Where psychological distress is disclosed by the DI applicant, a purely diagnostic approach proves a weak discriminator of risk. Exclusions are not well understood by consumers nor easy to enforce at claim stage.

The management of any episode of psychological distress in clinical practice is not just a matter of diagnosis but requires understanding in a much broader context. The individual’s experiences are important, but the history, personality, resources, social setting and the nature of the circumstances themselves must be grasped. Using this bio-psycho-social model helps to understand why one person experiences significant distress (possibly illness) in a set of circumstances, whilst another manages perfectly well.” Click here to read more

In other news

Partners Life: Partners Life Academy guide  

From Insurance Business Mag: 5G rollout will lead to new cyber risks - report

From GenRe: PFAS and Microplastics - The Next “Toxic Torts” on the Horizon?


Gen Re's Andres Webersinke calls time on over-generous disability income insurance products

Andres Webersinke is Head of Life/Health Region Australia/New Zealand for General Reinsurance Life Australia Limited. Andres identifies the issues facing disability income insurance, which are many. Briefly, they are: 

  • Over-insurance - on an individual case basis. Usually the replacement ratio is too high, caused by a failure to offset some income during the claim.
  • Benefits paid without tax deducted - and claimants may not pay tax for a variety of reasons
  • Employers failing to support a person through either work changes or rehabilitation opportunities
  • Rating / research houses encouraging broader or more generous policy definitions
  • Reinsurance and cross-subsidisation
  • Product design
  • Underwriting
  • Pricing
  • Claims philosophy

Andres also makes suggestions to tackle some of these issues. With a little creativity there are more opportunities beyond these too. Drilling down into individual segments that have particularly poor outcomes would yield more opportunities to tackle some of the knottiest issues. Examining product combinations - particularly those with mortgage protection, but not only them - could also help a lot. Two concepts of the insurtech world could also unlock solutions for a large part of the market parametric cover and claims automation. You can obtain your copy of the report by contacting Gen Re.

Time for change by Andres Webersinke v2

 

 


Gen Re: machine learning and underwriting

Gen Re has an excellent article on the role of classification model performance in underwriting. This includes some useful comments on machine learning, plus the gloriously-named 'confusion matrix' with associated metrics for assessing the accuracy of models. There are some broad implications for the future of underwriting which can be drawn, you should check out the whole article, of course, but the thoughts below are my own, based on their article and other sources:

Larger data sets, and especially digital test data sets of sufficient size, are particularly valuable for assessing a model. Companies would do well to both maintain such data sets (over time, with claims performance data attached) and the expertise necessary to assess the value of different classification models. A presumption of the efficiency of current underwriting methodologies is not necessarily well-founded. It is also somewhat self-selecting and may lead to ignoring data not currently collected, which could be of value in developing new methods for making underwriting assessments. Non-traditional data sources - such as credit records, social media profiles, wearable health tech, and so on, could provide new opportunities for assessment models. You won't know until you look, so some investment in collecting better data is necessary R&D expenditure.

Data collected is not always equal to data assessed, also, data required to apply for a product may be reduced, while data-collection may continue after application (and it may be useful and economically rewarding to continue to collect the data) so that better analysis of factors for future modelling may be identified. A practical version of that point might be: we can still have a non-underwritten product (to make application easy) and collect lots of data to feed our machine learning tools to enable better underwriting decisions to be made on the basis of third-party data, for future sales.

 


Aspire Conference by Gen Re

Gen Re hosted an excellent conference on underwriting and actuarial matters in Auckland on Wednesday. Topics covered included: insuring diabetic lives, health incentive programmes, progressive trauma pricing, behavioural economics and application forms, insurtech, surveillance and investigations, and pastimes underwriting. Although there was lots of good content, for me the New Zealand lump sum study was perhaps the most interesting. But Insurtech was valuable as well. That may be a reflection of the fact I am less familiar with underwriting and claims, and more familiar with insurtech. I shall write longer pieces on some of the most interesting ideas. 

GenRe Aspire conference

Gen Re staff presenting on the day included, from Gen Re Life Australia: Andres Webersinke, Managing Director, Robert Kerr, Senior Account Manager, James Louw, Chief Actuary, Viviane Murphy, Senior Account Manager, Lindsay Cross, Principal Underwriter, Rob Frank, Principal Claims Advisor, Matthew Ramjan, Chief Underwriter, Winncy Wong, Senior Pricing Actuary, Li Wen Beh, Senior Pricing Actuary, Carol Smit, Head of Claims. From Gen Re Life Cologne, Karin Neelsen, Head of Product Underwriting.