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.

The surgeon, the insurance company and the $50,000 bunion

Here is the story of a lady who had complications after bunion surgery and was claiming on her income protection benefit from MAS. After returning to work for over 40 hours per week Juhasz was no longer entitled to the benefit and has now lost a legal battle which states she must pay back the over payments of approximately $50,000.

Upgrade Policy Wording

Here is a list of when the upgrade benefit come into effect for each insurer.

HFANZ: Health Insurance Coverage Rises

HFANZ released figures yesterday confirming that the number of New Zealanders with private health insurance cover has continued to increase over the past year, along with the total value of claims paid.

The release read:

'Despite paying healthcare claims of over $1 billion in the year to the end of September, the industry says it could be playing a much larger role in funding New Zealand’s healthcare costs if the Government was more open to recognising its strategic value.

HFANZ chief executive Roger Styles said successive governments had largely ignored the potential contribution from private health financing, despite increasing public funding difficulties.

He said recent research by NZIER suggested that health insurance could be funding up to $2-3 billion per annum in healthcare costs if New Zealand could match the levels of countries with similar health systems who harnessed private funding better.

 

“Given the current and forecast state of public health funding, it would seem obvious that some strategic thought should go into growing alternative health funding sources. Looking to develop more robust private funding of healthcare can only help relieve public funding pressures and improve overall health outcomes,” Mr Styles said.

He said he believed the Government’s draft health strategy, released last week, needed to give more prominence to growing private health funding to help counter the looming public funding shortfalls.

“If we had a more strategic approach to health financing, then we’d already be looking at the type of initiatives in the Affordable Healthcare Bill – a NZ First member’s bill currently before Parliament – such as getting rid of fringe benefit tax on employer-funded health insurance for their staff,” he said.

HFANZ statistics for the September quarter showed an increase of 3400 lives covered, bringing the total number of New Zealanders with health insurance to 1.337 million. On an annual basis, lives covered increased by 4600, or 0.3 percent, for the year ending September 2015.

Total claims paid amounted to $1.023 billion for the year ending September 30, 2015 – up 4.9 percent on the previous 12 months. Claims paid for the September quarter were $274 million, up 4.1 percent.'

Difficulty Comparing Policies Highlighted by Interest.co.nz

Jenée Tibshraeny, at interest.co.nz, has a good piece about "navigating the road blocks preventing you from comparing 'apples with apples' when shopping for life insurance." As we spend a lot of time comparing policy documents we agree. The article is well worth a look. 

Tibshraeny highlights: 

"Of the 20 life insurance providers I’ve looked at, only half have published their policy documents on their websites.

These include AA Life, ANZ, ASB, BNZ, Cigna, Co-op Bank, Countdown, Kiwibank, Pinnacle and Westpac.

Those that haven’t include AIA, AMP, Asteron, Fidelity, MAS, OnePath, Partners Life, SBS, Sovereign and Volo."

Although I have to point out that AIA, AMP, Asteron, Fidelity, OnePath, Partners, and Sovereign do make their documents available publicly online: through sites like LifeDirect, KiwiCover, and others. If you google them, you can get several links to their policy documents. 

Tibshraeny then moves on to highlight the differences in wordings. This is trickier territory. There's a difference between "bad" differences which are merely confusing and make it hard to compare policies and "good" differences which make a policy demonstrably better than the others. There is a difference between documents that have a lot of superfluous words and details for cover that you did not buy, and those that have lots of long words because they cover more medical conditions. 

There have been some interesting developments in the UK to help raise consumer confidence in wordings.

But it all starts with a policy document.

Of course, most consumers do not read the document before they buy, but it is hard to argue that they should not have the opportunity to do so. 

 

Medical Premium Comparison Database Update to version 38

We have just uploaded a new version of the Medical Comparison database to all subscribers (by various methods, depending on your security set-ups). 

The changes in the current version are:

• New OnePath rates effective 8th December
• New Partners rates effective 1st January
• New Sovereign policy fee effective 1st January

Please contact us directly for more information about the update. Quotemonster users should note that all these changes have been live on the Quotemonster site from their respective effective dates. You can follow Quality Product Research Limited on LinkedIn to receive regular updates on your mobile device. 

28 Companies Now Researched by Quality Product Research

The New Zealand insurance market is richer, bigger, and more complex than you might suspect. Through adviser demand Quality Product Research has expanded the number of companies researched to 28, and that number is still likely to rise. 

If, like most advisers, you don't use anything like that number of companies, they may still be useful to you:

• You may come across their products in the market and wish to do a comparison.
• You may be looking for a product solution for a client and find it is offered by an insurer you were unaware of.
• You may be approached by a new company and wish to build competence in advising on their products before you talk to clients about them. 

You can check out the full list at the Quotemonster blog.