moneyblog

Robo-advice vision: overlooking the insurance dimension

An article from NZ Herald explains that the concept of robo-advice is on the books for 2018. The FMA made an announcement after receiving 49 submissions with the majority of these in favour of robo-advice. Interesting to read the list of companies that the NZHerald note submitted on the law. This isn't the full list, just the ones the Herald picks out to mention, probably based on their familiarity with the brand names:

'The consultation period, which ran from June 21 to July 19, included submissions from: Cigna Life Insurance, Delta Insurance NZ, Fidelity Life Assurance, the Institute of Financial Advisers, the Insurance Council of NZ (ICNZ), Medical Assurance Society of NZ, Partners Life, Southern Cross Medical Society, as well as major retail banks ANZ, ASB, Westpac NZ, fintech start-ups and law firms.'

Look at that list again - seven of the organisations mentioned are insurers or insurance-focused. Yet this article exclusively covers the funds management sector, excluding insurance, probably because it is written by an investment-focused adviser. Readers should not make the same mistake - insurers in New Zealand are very interested in robo-advice. But moving past that, a number of useful points are made. One is about fee transparency - and the connection to improved requirements for the advice process under the draft new Financial Services Legislation Amendment Bill are important. Robo advice services should be subject to the same rules as human advice services, although specific regulatory requirements will differ, because the nature of engagement with the services, and how they are run differs.

Click here to read more.

GI: Tim Grafton on Managing Business Risks

Risk management means taking a broader view of business risks and the approaches to resolving them than a basic mix of 'she'll be right' and a bit of insurance. Making a business more resilient does cost money, but can have other benefits too: and help manage threats from competitors as well as earthquakes, fires, and floods. This is worth a read - link. 

Insurance Council Questions Seismic Restraint Compliance in Wellington's Quake-Damaged Buildings

According to the Insurance Council some buildings damaged in Wellington by the recent Kaikoura earthquake may not have complied with guidelines for non-structural, seismic restraints. Click here to read more.

Youi Receives Maximum Fine by Insurance Council

Youi have been fined the maximum financial penalty of $100,000 by the Insurance Council for 'dodgy sales tactics'. Click here to read the full article on NZ Herald.

Northland Man Denies Burning Down House but Insurer Refuses to Pay Out

This is the story of a Northland man who's house burnt down while he was over 400km away. The insurer is refusing to pay out claiming he started the fire himself remotely. 

'He said he was in fact under-insured when his house burnt down, which would make him a pretty lame arsonist. He pointed out that after years of legal battles he was in fact acquitted of the arson charges that were laid against him, and that the Crown had never been able to show that the complicated printer-ignition method actually happened. Contrary to the insurer's allegations, he said, he wasn't in serious financial difficulty before the fire.'

Well, that looks like a fascinating case. 

Susan Edmunds On Life Insurance Code

Susan Edmunds writes in Goodreturns on the idea of a life insurance equivalent to the Fair Insurance Code used by Fire and General Insurance companies. Link. 

Review of the New Fair Insurance Code

This article from interest.co.nz has David Caygill, former Labour Finance Minister, reflecting on the lessons learned from the Canterbury earthquakes as he reviews the new Fair Insurance Code.

“Please, please stay in touch with your customers. The worst aspect of the last five years has been the long silences. The periods of months at a time where you could get no sensible answer at all.” Caygill says.