AIA introduce AIAHub Learning, and more daily news

AIA has announced that AIAHub Learning is set to be introduced.  AIAHub Learning is intended to provide resources and help advisers keep their knowledge and skills up to date. AIA noted that AIAHub Learning has been designed to enable advisers to develop competency, knowledge and skills as well as providing a place to record all professional development activities and understand all learning requirements.

“AIA is committed to providing you with the best tools and resources to provide an outstanding financial advice service.

To help you deliver this service to your clients, and keep competence, knowledge and skill up-to-date, we are excited to introduce AIAHub Learning.

AIAHub Learning is designed to:

  • Assist you to develop and maintain your competence, knowledge and skill for the financial advice you give.
  • Provide you with a system to record your learning activities.
  • Communicate with you around your AIA learning requirements so that you can continue to focus on delivering good client outcomes.”

Click here to register

Introduction to AIAHub Learning

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Accuro on how COVID-19 impacted the industry, and more daily news

Accuro CEO Lance Walker has shared insight on how COVID-19 impacted the industry. Walker has noted that Accuro saw higher than usual levels of policy suspensions and lower claims during the second quarter of 2020, then higher claims towards the end of the year. Regardless, Walker highlighted that Accuro remained resilient because of the business continuity process in place. New business sales has been described as remaining at good levels during the initial COVID-19 period in 2020 and continuing into 2021. Walker has said that there has been very strong direct sales for individual policies and strong growth in group sales. Accuro has concluded that there is now a heightened awareness of the benefits of health insurance.

“The insurance industry took a hit from the COVID-19 pandemic last year, with many insurance providers and their people forced to quickly adapt to the unstable environment and address emerging risks.

Now that New Zealand has largely eradicated the pandemic, Accuro Health Insurance (Accuro) chief executive officer Lance Walker shared with Insurance Business how it impacted Accuro and the health insurance sector, the current challenges in the industry, and how to address risks.

Walker (pictured), who joined Accuro as a CEO during the COVID-19 pandemic last year, said the pandemic’s most immediate impact was that hospitals were not performing elective surgeries during the lockdown. As a result, Accuro saw lower claims during the second quarter of 2020, then higher claims towards the end of the year.

 

“We also saw higher than usual levels of suspensions due to financial hardship – although most of these are now reverting to paid policies,” Walker continued.

Despite the impacts of the pandemic on the sector, Walker shared that Accuro remained resilient, thanks to its business continuity processes.

“Like many organisations, the COVID-19 lockdown was a live test of our business continuity processes, and the team came through that with flying colours,” he said.

“We were able to conduct business remotely from day one with minimal impact on our levels of customer service (our levels of customer satisfaction remained above 90% for the 2020 year). This remote working model has continued post-COVID-19, with many of our team now choosing to work from home from time to time in line with our flexible working policies.”

Accuro’s new business sales also remained at “good levels” through both the initial COVID-19 period in 2020 and continuing into 2021.

“In particular, we have seen very strong direct sales in the individual space and strong growth in group sales,” Walker said.

“Our conclusion is that COVID-19 has heightened awareness of the benefits of health insurance – both for individuals and employers (who are even more focused now on employee health and wellbeing).”  Click here to read more

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Cigna implements new commission, and more daily news

Cigna has implemented several new changes to their commission model. Advisers will now receive 100% of Cigna’s documented commission rates, regardless of their persistency rates or group affiliation. With this change, advisers will now have the power to decide how commissions are split. Commission payments will now begin from month two. Cigna has said this change was introduced in acknowledgement of the extra time and effort advisers are putting into their businesses. Another change is giving adviser the option of choosing the payment period with the as earned option. Advisers can now choose between upfront payment and spreading the payment over the first two years. Advisers that choose to spread payment over two years will ensure that there is no clawback if a policy lapses during that time. Cigna has added more selection to their discounting options. These options have been linked to spread commissions.

Renewal Commissions will now be paid from month two

We recognise that the servicing of your customers doesn’t start from month 13, it starts from the moment their policy is issued.

With the new regulatory environment you’re now operating in, we acknowledge the extra time and work you’ll be dedicating to your business. So we want to support you further as you work harder to protect your customers.

From now on you’ll be paid all the commission

All Advisers, regardless of persistency level and/or Group affiliation, will now receive 100% of our documented commission rates. We can help facilitate any splitting of commissions you need to do, but you are in total control of where it goes.

We’re introducing an ‘as earned’ payment option

Choice matters. So we’re giving you option to receive your commission payments over the first two years, instead of upfront. With this option there’s no clawback if a policy was to lapse in the first two years.

More flexibility with our discounting options

To provide you more flexibility and options to suit your customer’s needs, we’re adding more selections to our discounting options and we’ve linked these to our spread commissions.

Updating our commission to include best in market features reflects our ongoing commitment to you and helps ensure New Zealanders have continued access to the quality advice you provide.”

Cigna commission table April 16 2021 3
Cigna commission table April 16 2021 3
Cigna commission table April 16 2021 3

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Cigna maintains AM Best financial rating, and more daily news

Cigna New Zealand has maintained a Financial Strength Rating of A and a Long-Term Issuer Credit Rating of A. Mark Schollum, Cigna Chief Financial Officer, has commented on the results saying that Cigna is pleased that the ratings haven’t changed. Schollum continued by saying that the unchanged rating is an indication of Cigna’s financial standing, business sustainability and strong global backing. Schollum has also noted that Cigna’s confidence should reassure financial advisers and customers during this climate. AM Best has highlighted that Cigna’s financial and operating performance, neutral business profile and appropriate ERM all contributed to the rating assessment.

“Cigna's Financial Strength Rating of A (Excellent) and Long-Term Issuer Credit Rating of “a” with stable outlooks, remains unchanged from last year's assessment.

Cigna New Zealand chief financial officer Mark Schollum says Cigna is pleased the rating has remained unchanged.

“This is confirmation of Cigna’s strong balance sheet, the underlying long-term sustainability of our business and our strong global backing,” Schollum says.

“At Cigna, we’re committed to being here for our customers not only now but in the long-term. Having this continued confidence in our business should be reassuring to our advisers and customers in these uncertain times.”

AM Best is a United States-based global credit rating agency, news publisher and data analytics provider specializing in the insurance industry.

In its rating report, AM Best states, "Cigna has strong earnings and dividends from the group’s insurance entities".

"These have helped bolster holding company metrics, such as interest coverage and reduction of outstanding debt...and Cigna’s insurance subsidiaries have consistently provided cash flow upstream in the form of dividends, which have been growing each of the past two years, given favourable operating results.

"Cigna Life & Health Group reported strong earnings again in 2020, supported by lower utilization in the face of the Covid-19 pandemic, with the organization also consistently reporting strong double-digit profitability ratios," the report states.

AM Best goes on to say the ratings of Cigna Life Insurance New Zealand Limited (CLINZ) "reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM.

"Furthermore, the ratings of CLINZ factor in rating enhancement from the Cigna group. This reflects integration and ownership from Cigna group and AM Best’s expectation that the group would provide capital support if required.”

“CLINZ ranks among the largest life insurance companies in New Zealand, benefiting from a multichannel distribution approach. While the company accounts for a small component of the Cigna group’s consolidated revenues and earnings, it is viewed as significant to the group’s operations in the Asia-Pacific region." Click here to read more

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AIA announce AIA Vitality enhancements, and more daily news

AIA has announced AIA Vitality enhancements. Len Elikhis, AIA NZ Chief Product and Vitality Officer, has said that changes have been made to ensure AIA continues motivating and rewarding members. The enhancements means that members have the option of getting a 25% discount on Samsung fitness devices as well as up to 50% off Event Cinemas tickets. Another added feature that members can utilise for free is the Allen Carr Easyway Quit Alcohol programme. More enhancements are expected in June 2021.

“Following the news late last year that AIA Vitality members could earn an Apple Watch for reaching weekly physical activity targets, the life, health, and wellbeing insurer today announced further AIA Vitality partnerships.

New partner brands, such as Samsung and Event Cinemas, along with the addition of the Allen Carr Easyway Quit Alcohol programme, will see AIA Vitality continue to support and reward members to improve their health.

“We’re regularly evolving our program to motivate and reward our members to live healthier, longer, better lives,” says Len Elikhis, AIA NZ Chief Product and Vitality Officer. “Utilising a global, science-backed program, AIA Vitality has given us the unique ability to engage with our customers on an ongoing basis, provide greater value and support healthier outcomes”.

From today, AIA Vitality members can enjoy a 25% discount on Samsung fitness devices, alongside existing program partners Garmin (25% discount) and Fitbit (30% discount). Len says tracking fitness can be a great motivator. “Whatever you do to keep active, activity tracking can help you stay committed and working towards your personal physical activity goals.”

Event Cinemas has joined Hoyts as an AIA Vitality rewards partner offering members up to 50% discount on movie tickets. “Having both Hoyts and Events Cinemas on the program gives our members more choice across the country.”

Another enhancement Len is pleased to share is the new free Allen Carr Easyway Quit Alcohol programme. “Following the success of the Allen Carr Quit Smoking programme, we are pleased to now support members looking to reduce their alcohol consumption.”

Since launching in August 2019, AIA Vitality has continued to grow. “Feedback from the adviser community and our members continues to be very positive,” says Len. “They have told us that they love the way AIA Vitality motivates and rewards behaviour change. We continue to receive feedback from members about tangible improvements in their health outcomes, which energises us to continue evolving the program.

“AIA Vitality is all about helping Kiwis learn more about their health, offering ways to improve it, and providing motivation and rewards along the way.

More exciting AIA Vitality partnerships and program enhancements are set to be announced in June 2021, continuing AIA NZ’s long-term commitment to helping New Zealanders get more out of life.”

AIA

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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

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Clients are starting to ask about ESG in insurance advice

Goodreturns looks like it enjoyed writing the headline for its recent article on the extent of KiwiSaver investments in weapons manufacturers: 

    "Boom: 88 KiwiSaver funds invested in nukes"

KiwiSavers have all sorts of different views, levels of engagement, and outlooks - but a great deal of them do not like the idea of "investing in nukes". Unpack that belief and the reality - investing in a large weapons manufacturer - may in fact be acceptable to some and completely unacceptable to others. The point here is not to make a judgement about whether these things are right or wrong. The point is that the concept of ethical, sustainable, and governance requirements is already bigger than the investment sector. It affects all forms of client spending.

The questions can be raised in shocking ways, at a time that will not be chosen by either advisers or product providers. Greenpeace had a very successful piece of shock-marketing when it ran a mock advert for milk highlighting the way Orangutan habitat is affected by development. We need to have good answers to the questions when they come. Even though I maintain large databases on all sorts of insurers and adviser groups I would struggle to quickly identify good data on ESG issues. It is an area I am determined to address in the coming year. Your thoughts on the subject are welcome too - do drop me a line. 

 


Financial Adviser Contingency Planning

The FMA rightly points out that contingency planning is preferable to breaking new advice law, in this piece by Daniel Smith, of Goodreturns. Insurers should support such an approach. Ideally, communications with advisers that have not yet secured either a transitional license or a role as an FA in a transitionally licensed FAP should be focused on planning for a managed transition to one of the other options.

  • First the plan should protect clients, simply doing a deal with another adviser to provide any advice that may be required during a period when the current business holds no license.
  • Second the plan should chart a direct path to a compliant FAP, or;
  • third, if that cannot be achieved then a managed transition out of the business should be implemented.

The FMA must police the boundaries of the system otherwise it makes mockery of the hard work done by thousands of advisers to do the right thing. The FMA are also right to point out that a legal alternative to non-compliance is available: ensuring sufficient financial advice coverage for their clients while compliance is achieved, or a managed shut-down or sale of the business is completed. 


Asteron Life SME insurance index 2020 findings, and more daily news

Asteron Life’s insurance index 2020 provided insight into the insurance-related decisions made by SMEs. The index illustrated that the number of SMEs with multiple life insurance cover decreased when compared to the findings of 2019, with 38% of SMEs having only one life covered in 2020 and 32% of SMEs having only one life covered in 2019. The index highlighted a decrease in SMEs seeking advice from financial advisers and insurance companies and an increase in independent navigation. The findings of the index conclude that SMEs that received advice were more likely to have a broader range of cover. Of the SMEs that sought advice from advisers, 89%  had life insurance cover, 50% had IP cover, 66% had trauma, illness, cancer cover and 50% had TPD cover. Of the SMEs that didn’t receive advice, 88% had life insurance cover, 27% had IP cover, 43% had trauma, illness, cancer cover and 27% had TPD cover. Click here to see all findings of the 2020 index

 

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AMP sale proposal falls through, and more daily news

AMP has revealed that the non-binding sale proposal made by Ares Management in October 2020 will not proceed. AMP has highlighted that it will continue to engage with Ares Management in regards to AMP Capital’s portfolio review. The AMP Board has confirmed that a transformation strategy for AMP Australia and AMP NZ wealth management is likely to be the best option for shareholders.

“In a portfolio review of FY20, AMP have revealed that Ares Management have withdrawn their non-binding indicative proposal to buy out AMP.

The report stated that, “Following detailed discussions, AMP has been advised last night by Ares that it does not intend to proceed with its non-binding indicative proposal for 100% of AMP [at] $1.85 per share.”

While acquisition of AMP is off the table, the report states that, “AMP continues to engage constructively with Ares in relation to AMP Capital as part of the portfolio review.”

While the U-turn from global asset management giant, Ares, may come as a surprise to some, AMP’s broader position is one of positivity according to the report.

“The review has confirmed AMP’s transformation strategy for the AMP Australia (Australian wealth management and AMP Bank) and New Zealand wealth management businesses is likely to be the optimal outcome for shareholders. The AMP Board has therefore concluded the review of these assets.”” Click here to read more

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