Legal and regulatory update for the life and health insurance sector

27 Jan 2021 – Privacy Commissioner announced that he will virtually chair an international Computer Privacy and Data Protection conference over 27-29 Jan, commencing NZ time 5 p.m. on Thursday, 28 Jan, with a live stream available. https://www.privacy.org.nz/resources-2/forums-and-seminars/computer-privacy-and-data-protection-conference-cdcp/

28 Jan 2021 - FMA released its review of NZX technology issues finding the stock exchange failed to meet its licensed market operator obligations due to insufficient technology resources. NZX also released a response to the FMA review. Relevant FMA and NZX web links are https://www.fma.govt.nz/news-and-resources/media-releases/fma-releases-review-of-nzx-technology-issues/ and https://www.nzx.com/announcements/366811

28 Jan 2021 – RBNZ released the results of a research report showing the Māori economy is increasingly diverse and opportunities remain for it to continue growing and reach its full potential. https://www.rbnz.govt.nz/news/2021/01/e-hauora-ana-e-matahuhua-ana-te-ohanga-maori-e-ai-ki-nga-rangahau


Do media hate insurance or love it?

Although it might appear that journalists love to bash insurers, it is easy to forget that there is some surprisingly useful coverage:

Last year the high-profile owner, Gabrielle Mullins of the Auckland performance venue The Powerstation, died of cancer. She was fundraising to pay for Keytruda, a chemotherapy drug not yet funded by Pharmac. https://www.stuff.co.nz/entertainment/music/122701023/gabrielle-mullins-the-owner-of-aucklands-powerstation-venue-dies-of-cancer. Earlier this year Michael Kooge, a radio show host, also hit the headlines with his cancer story, saying "It's all pretty unlucky, if I had medical insurance when I was in my early 20s, before I got sick, I would be able to get this treatment covered, but because I didn't I'm being left to die.” At the same time Stuff linked to coverage by Tim Fairbrother of Rival Wealth discussing which type of medical insurance would be best. https://www.stuff.co.nz/business/81385630/what-type-of-medical-insurance-works-for-you-will-depend-on-your-circumstances

Each story is a tragedy. Also, the insurance industry could hardly hope for better promotional coverage. I draw your attention to what is implicit the first article and explicit in the second: that an unfunded drug would have helped, and that insurance would have funded this. In stories like these, it seems, the media believe in insurance. At other times, it appears that they ignore the vast volume of claims paid and believe that insurers are solely focused on denying the payment of claims. Is the glass actually half full?


nib views on financial advice, and more daily news

nib has said that members that receive financial advice are better off. In addition, nib CEO Rob Hennin noted that half of nib’s members join via financial advisers. Hennin credited nib’s view by highlighting the findings from an internal study which found that members with advisers have more financial certainty and more health benefits. Hennin used the findings of nib’s internal study and studies commissioned by the FSC to conclude that people who receive financial advice are better off, saying that people with financial advice experience an improvement to their overall health.

“Health insurer nib says it is “absolutely clear” that customers with insurance advisers end up better off, and says advisers have done an “extraordinary” job adapting to the challenges that have come with COVID-19, and multiple lockdowns.

According to nib New Zealand CEO Rob Hennin, approximately half of the insurer’s business currently comes through its adviser channel. He says its internal studies have been clear – customers with advisers have more financial certainty, and also see increased health benefits as a result.

“It’s absolutely clear from our research and the work the Financial Services Council has done that Kiwis who receive financial advice are better off,” Hennin told Insurance Business.

Hennin acknowledged the work advisers have done saying that their response to COVID-19 was extraordinary. Hennin mentioned the increased use of digital tools and other methods to reach and assist clients.

“Advisers have just pivoted and done an extraordinary job throughout COVID-19,” Hennin added.

“They’ve really embraced digital tools and they’ve gone out, consulted with their clients and done whatever they can to ensure they all have access to the care and protection that they need.”” Click here to read more

In other news

Southern Cross: Insurer promises to “build momentum” and enhance products at AGM

AIA: Belief in oneself key to empowering women


Your insurer would not be happy about this...

Finder.com.au, an Australian money site, has done some research on Kiwi attitudes towards insurance. This was about general insurance, but I did think it amazing: 

A nationally representative survey of 2,001 New Zealanders aged 18 and above found that 88% of Kiwis lock their door, leaving 12% who do not.  That’s equivalent to 218,880 households not taking necessary safety precautions and leaving themselves vulnerable to break-ins. 

The second most commonly used home protection is house and contents insurance with 64% of Kiwi households having an insurance policy. Rounding out the top three is having locks on windows (52%). 

Do you see what I see? I think it amazing that insurance is referred to a home protection method in the midst of a list about locking your house and having locks on windows. We, the industry, may be partly to blame for referring to insurance often as wealth protection, equally frequently abbreviated to 'protection'. But the problem I have is that it may be seen as an alternative to physically securing your home. That is an exemplar of 'moral hazard' - that people may take less care when the financial consequences of their actions are reduced. Do we see this in the way people treat their health? Put another way, is there any evidence that we would not?

Of course I don't think that there are lots of people rationally, consciously, deciding to eat too much, not put on sunscreen, and undertake hazardous activities because they have insurance. It is a more subtle kind of pressure that is relieved. It is more like the way everyone drives a little faster when the road is wide and even than when it is narrow and has many corners. 


AIA enhance AIA Vitality, and more daily news

AIA has announced the addition of a new benefit to AIA Vitality. Customers will have the chance to earn an Apple Watch when weekly physical targets are reached. This change is intended to motivate customers to increase physical activity. To have the chance to earn the Apple watch customers will need to enter into an interest-free loan agreement to ensure upfront costs are covered. Once customers enter to agreement, AIA contributes to monthly repayments, if physical targets are met, customers will not be required to pay anything. Len Elikhis, chief product and vitality officer, has said that this new addition to AIA Vitality will offers significant value to customers.

“AIA recently launched a new benefit for its AIA Vitality customers, and is giving them the chance to earn an Apple Watch for reaching weekly physical targets – an initiative it says will be a strong motivator for customers to increase their physical activity.

 

To earn their Apple Watch, customers must enter into an interest-free loan agreement to cover the upfront cost. AIA then contributes to the monthly repayments, and if all physical targets are reached, the customer ends up paying $0.

 

Len Elikhis, chief product and vitality officer says the initiative offers “significant value” to the AIA Vitality membership base, which has been growing steadily since its launch.”

 

Elikhis noted that the new initiative is intended to make the Apple Watch Series 6 more accessible as well as encouraging members to achieve goals. 

“The Apple Watch Benefit is another example of the significant value AIA Vitality is providing for our members,” he concluded.

 

“The aim of the benefit is to make it easier for members to access Apple Watch Series 6 to further encourage our members to achieve their physical activity goals.” Click here to read more 

In other news

AMP: AMP Capital insider flies into top job

NZFSG: NZFSG Makes New Appointment


Industry associations merge

The Health Funds Association of NZ will merge with the Financial Services Council from 1 December. Congratulations to the FSC and HFANZ on concluding the merger. In an increasingly complex environment, driven by regulatory change, technology, and consumer choice, it makes sense to have a single, stronger, industry advocate capable to looking across the wide range of issues in common facing the sector. 

From the media release: 

Health Funds Association of New Zealand (HFANZ) and the Financial Services Council (FSC)
today announced a merger into one single organisation under the Financial Services Council
banner from 1 December 2020, creating a membership association of close to 90
organisations.

In a major milestone for the sector, the merger brings together Health Insurance with the
Life Insurance, KiwiSaver, and Investment industries and will place a focus on achieving
good customer outcomes, ensuring sustainability of the sector, and lifting standards and
professionalism from a single, stronger voice.

Rob Flannagan, Chair of the Financial Services Council said, “The merger is a great
opportunity to bring the health and life insurance industry together under one roof and
focus the efforts of our joint members on the important issues of the day, and most
importantly of all, driving better consumer outcomes.”

Len Elikhis, Chair of HFANZ, said “The Health Funds Association of NZ members represent
80% of the health insurance sector and has a rich heritage of over 30 years.

“The private health insurance sector supports 1.4m New Zealanders to meet their health
care costs. We believe that a well-balanced and integrated health system is key to achieving
great patient outcomes.

“I would like to take this opportunity to thank our members for their significant contribution
and we look forward to playing an active part within the Financial Services Council,”
concluded Elikhis.

Richard Klipin, CEO of the Financial Services Council said, “Coming together to build a
stronger association is exciting and important for protecting the health of Kiwis.

“With a bigger, stronger and larger organisation of around 90 members, this merger will
focus our work in the sector and create a stronger voice that will help shape the future
financial wellbeing of Kiwis,” concluded Klipin.


nib Group deploy new digital claims process, and more daily news

nib has announced the implementation of Melvin, a machine learning engine, that will process claims that are submitted via the app. The adoption of this engine is intended to reduce manual data entry. Brendan Mills, nib Group CEO, has said that after nib enabled photo submission and claims via the app, user experience improved while information processing time increased. 

“Nib has implemented a new machine learning engine to process claims submitted via its app in less time by reducing the amount of manual data entry required behind the scenes. 

 

Five years ago the health insurer introduced a new feature that let members take a photo of their receipt and submit a claim via the app. 

While that improved the customer experience, it became a challenge to process the information at the backend as the volumes of photos increased, said nib's CIO Brendan Mills.

 

“We created a great customer experience but we then also caused ourselves some pain in processing photos because we're then taking a whole heap of flat images and having to rekey all the data [such as] provider number, customer number…it was quite an intensive process,” Mills told iTnews.

nib has said been trialing systems for the past six months. The engine uses AWS Textract to pick up all relevant information from submitted photos. The engine is set to save 20 seconds in handling time per claim, with half not needing further human intervention. nib is looking at expanding the service to process more claims, improve the service, and improve accuracy. 

“For the past six months, the health insurer has been using machine learning algorithms to strip information from the photos and pass it through to the core claims processing system. 

 

The engine, dubbed Melvin, was developed with data science consultancy Eliiza and uses AWS Textract to read the relevant information from the photos. 

 

Mills said the process saves an average of 20 seconds handling time per claim, and about half of the claims require no further human intervention to rekey or adjust any of the fields from the image. 

 

The insurer is now considering how to expand the service to process more claims, improve accuracy levels and determine if claims can be paid out without any human intervention. 

 

Mills said work is underway to determine the types of claims that have a very “high confidence” level to approve automatically, possibly with a post-processing quality assurance mechanism in place.” Click here to read more

In other news:

nib: adult or child signing up to Easy Health, Ulitimate Health Max, or Ulitimate Healththrough nibAPPLY will give them two month free cover. Offer ends 31 January 2021

FMA: FMA seeks consultation on proposed guidance for advertising

SHARE: SHARE confirms Newpark acquisition


nib publish finding from parenting survey, and more daily news

nib has published the findings from its State of the Nation Parenting Survey. The survey looked into the concerns of parents in 2020. Behavioural issues was identified as the top health related concern. This concern was raised by 34% of all participants. While parents with young children reported that their biggest concern was children experiencing extensive episodes of irritability, anger and short-temperedness. Nathan Wallis, nib parenting expert, commented saying that the shift during lockdown added to an already emotional stage for toddlers. When discussing lockdown experiences, participants noted that prolonged negative behaviour were common occurrences.

“Leading health insurer, nib New Zealand, has released the findings from its second annual nib State of the Nation Parenting Survey, shedding light on the concerns that have been top of mind for Kiwi parents during a year unlike any other.

 

Behavioural issues are the number one health concern Kiwi parents have for their children, cited by more than a third (34%) of respondents, up 13% from 2019. Last year’s biggest health-related concern, sleep, still features prominently, as do stress levels and diet and exercise.

 

Taking a closer look at families’ lockdown experience, the number of respondents reporting sustained episodes of negative behaviour from their children (lasting two weeks or longer) grew significantly during the nationwide lockdown period. Concerningly, this increase has been largely sustained since lockdown ended.

 

Parents of younger children reported prolonged episodes of irritability, anger and short-temperedness as their biggest concern, while among parents of high schoolers, the sharpest increase came in levels of concern around changes to children’s motivation.

 

nib parenting expert, Nathan Wallis says, “Lockdown saw most families dealing with added stress as they adapted to new and novel experiences. Toddlers may in many ways have felt this most acutely as they are already in a very emotional stage of development - it’s called “Terrible Twos” for a reason. Toddlers are also just beginning to learn how to manage their emotions, so it’s mum and dad who have to do most of it for them. This was understandably compounded by lockdown, so many parents of toddlers had it quite hard.””

The study also found that parents struggled. Participants reported that their motivation, energy levels, and performance at work decreased during lockdown while feeling overwhelmed increased. Parents reported that their biggest source of stress was financial uncertainty which impacted 39% of participants. The study found that only 8% of participants didn’t feel any stress.  When discussing the future, 70% of participants reported that they felt positive and 67% believed that lockdown helped to solidify their family unit.

“The findings also clearly demonstrate the toll 2020 has taken on parents themselves. Lockdown saw sharp increases in the number of respondents suffering from decreased motivation, decreased energy levels, a sense of feeling overwhelmed, and declining performance at work. Any subsequent reduction since lockdown ended has been limited to just one or two percentage points.

 

The biggest source of stress reported by parents this year was financial uncertainty, impacting 39% of respondents – followed closely by the impact of COVID-19 on the world, general job-related stress and the economy. Fewer than one in 10 respondents (8%) reported not feeling any particular level of stress over this period.

 

For the 42% of respondents who saw their financial situation worsen due to COVID-19, the impact of this was reflected in general stress levels, and also felt in terms of quality of sleep and relationships.

 

Despite an undeniably tough year, it’s not all bad news. When asked about the outlook for their family, 70% of respondents reported feeling positive about the future and 67% believe lockdown strengthened their family unit, with many reporting a greater sense of happiness, and better communication as a result.”

 

Here is a list of the key findings: 

Parents’ biggest health-related concerns for their children:

·       Behavioural issues – 34% (up 13% from last year) 

·       Diet and exercise – 33% 

·       Sleep (lack of, too much, pattern changes) – 31% 

·       Stress levels – 31%

Biggest behavioural concerns, with episodes lasting two weeks or longer (as experienced pre-, during and post-lockdown): 

· Pre-school children – prolonged episodes of irritability, anger and short-temperedness. 

§  12% pre-lockdown, 28% during lockdown, 25% post-lockdown

· Primary and intermediate children – prolonged episodes of irritability, anger and short-temperedness. 

§  17% pre-lockdown, 32% during and 28% post-lockdown

·       High school children – prolonged episodes of decreased motivation. 

§  12% pre-lockdown, 37% during lockdown, 23% post-lockdown

 

Biggest personal impacts of lockdown – experienced by parents themselves: 

·       Decreased motivation – 13% pre lockdown, 29% during lockdown, 28% post-lockdown

·       Decreased energy – 14% pre-lockdown, 29% during lockdown, 30% post-lockdown

·       Feeling overwhelmed – 19% pre-lockdown, 33% during lockdown, 31% post-lockdown 

·       Declining performance at work – 5% pre-lockdown, 14% during lockdown, 13% post-lockdown

 

Parents’ biggest sources of personal stress: 

·       Financial uncertainty - 39% of respondents

·       The impact of COVID-19 on the world - 36%

·       General job-related stress - 34%

·       The economy - 34%

 

Impact of lockdown on family unit: 

·       Greatly strengthened family unit – 24%

·       Somewhat strengthened family unit – 43% 

·       Made no difference to family dynamics / relations – 28%

·       Somewhat weakened family unit – 4%

·       Greatly weakened family unit – 1%

 

Parents’ outlook for the future of their families: 

·       Very positive – 22%

·       Positive – 48% 

·       Neutral – 18%

·       Concerned – 2%

·       Extremely concerned – 2%

·       Don’t know / unsure – 8%

 

In other news: 

AIA: AIA Taking Small Steps campaign won Best Brand Campaign at Interactive Advertising Bureau awards

Southern Cross: Little heart monitor can be sent to patients in the mail, speeding up results

Southern Cross: New findings reveal we put higher pressure on ourselves than others

 


Southern Cross launches Cancer Cover Plus, and more daily news

Southern Cross has announced the launch of Cancer Cover Plus. The new cover is intended to give members broader chemotherapy options. Cancer Cover Plus will give members the option to upgrade to Chemotherapy 100, which has a benefit limit of $100,000 or Chemotherapy 300 which has a benefit limit of $300,000. Additionally, members will have the choice to access non-Pharmac cancer drugs.

“Southern Cross Health Insurance (SCHI) is launching competitive cancer care cover to give members more choice when it comes to chemotherapy, including increased access to cancer drugs not subsidised by Pharmac.

SCHI’s new Cancer Cover Plus has two optional upgrades - Chemotherapy 100 (benefit limit of $100,000) and Chemotherapy 300 (benefit limit of $300,000) – to help members during their cancer treatment journey. This covers the cost of Pharmac and non-Pharmac, Medsafe indicated chemotherapy drugs and their administration for the treatment of cancer.”

Nick Astwick has said that the new cover has been designed with the needs of members in mind. Cancer Cover Plus has been developed to complement the unlimited surgical and radiotherapy benefits. Astwick notes that the cover was created so more New Zealanders have faster and more access to affordable cancer treatment options.

“We understand that a cancer diagnosis, or the fear of one, can be scary for people so we wanted to give members peace of mind by providing them with more cancer cover options.

 

“We have developed them to complement the unlimited surgical and radiotherapy benefits we offer in most of our plans, and this will help to provide a comprehensive package to the vast majority of our members who have these products and also tell us their main concern is cancer care,” he said.

 

The Southern Cross Healthy Futures Report 2020 revealed that 79 per cent of New Zealanders are concerned about not having access to cancer treatment services and 59 per cent are worried about experiencing or developing an illness or disease.

 

“Not all cancer drugs are funded by Pharmac which makes them unaffordable for many people. We created this new cancer cover so Kiwis could have faster access and more treatment options to receive potentially lifesaving chemotherapy drugs if they need to,” said Astwick.” 

In other news:

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From Partners Life: Do your self-employed clients have the right income cover?