New Partners Life partnership means update to claims system

An announcement on Partners Life and FINEOS Corporation claims system partnership has been made public. The partnership will mean that current claims systems and processes will be replaced. See details below.

“DUBLIN--(BUSINESS WIRE)--FINEOS Corporation (ASX:FCL), the market-leading provider of group and individual core systems for life, accident and health insurance, today announced that Partners Life, following a comprehensive market evaluation of Claims Management System vendors, has selected the FINEOS Platform for life insurance and medical claims.

The Partners Life and FINEOS partnership will bring about changes focused on replacing existing claims systems and processes with a differentiated value proposition. This will bring key operational benefits such as efficient, integrated and automated workflow processes and accurate claims covering life, TPD, trauma, income protection and medical products.

Speaking about the selection, Tracey Lonergan, Partners Life Chief Claims Officer said, “Claims service is at the core of Partners Life’s business and so when we looked for a credible provider it was important that the provider had the capability, experience and infrastructure to deliver and support a Claims Management System that would integrate into the Partners Life ecosystem. Also important to us was that the selected vendor come with a strong record of successful implementations and strong support of its Claims Management System within the New Zealand and Australian life and health insurance industry. FINEOS met these requirements. Our initial collaboration has been extremely positive, and we envisage that the project will deliver high quality results”

Commenting on the deal, Michael Kelly, CEO, FINEOS added, “We’re delighted that Partners Life has selected to partner with FINEOS and adopt the FINEOS Platform for life insurance and medical claims. The FINEOS Platform includes a market tested, pre-configured pack for the region known as LISA (Life Insurance Solutions Australasia). This is an exciting project for us in New Zealand and we look forward to a fast and smooth system implementation to enable the benefits of using FINEOS as early as possible thereby delivering a high-level service to its customers and independent financial advisers across New Zealand.

The FINEOS Platform provides a comprehensive SaaS end to end core solution for the Global Life, Accident and Health market. Key to the solution is the rich functionality that underlies FINEOS AdminSuite, FINEOS Engage and FINEOS Insight, a common set of capabilities including workflow, rules engine, customer management, no-code/low-code configuration tools, a standardized API connection and the cloud environment powered by AWS.”

More details for FINEOS can be found here. We think that claims automation will become increasingly important to ensure a range of claims goals: such as fair application of policy terms, meeting the requirements of good conduct obligations, containing costs, and speeding up the whole process. 

 


nib report on interim results, and more daily news

nib New Zealand has reported on the half year results that were presented in a webcast by nib holdings limited. nib New Zealand CEO Rob Hennin has said that the results to 31 December 2020 were pleasing. Hennin noted that there were 3,135 new policies in the past 12 months, this is a 2.8% increase in health insurance coverage. nib also found that claims increased 7.6% as members were seeking medical care after lockdown. Hennin continued by explaining that $6.5 million claims catch-up provision has been released.

“nib New Zealand today announced its results for the six months to 31 December 2020 (1H21) with premium revenue up 7.9% to NZD$136.1 million and underwriting result1 of NZD$12.3 million broadly in line with same period last year (1H20: NZD$12.6 million).

nib New Zealand Chief Executive Officer, Rob Hennin said overall the result was pleasing with earnings stable as healthcare treatment bounced back following COVID-19 restrictions.

“Despite uncertain market conditions, over the past 12 months we grew New Zealand residents health insurance coverage by 2.8%, adding 3,135 new policies,” Mr Hennin said.

“Our first half result also shows claims increased 7.6% as members head back to their medical professional or seek treatment following first wave of COVID-19 restrictions.

“We know from our claims experience that many of our members either had healthcare treatment delayed or chose to stay away from hospitals during the peak of the pandemic,” he said.

“Its great members are now feeling more confident and getting the necessary healthcare treatment. Recognising some healthcare treatment in FY20 was simply deferred not cancelled during COVID-19, nib set aside a provision meet this expected claims catch-up over the course of FY21. As at 31 December 2020, NZD$6.5 million of the NZD$9.0 million provision has been released,” he added.

Hennin revealed since lockdown, neurological, cardio-thoracic surgery, diagnostics, and gynaecological claims have experienced the largest increase.  It was revealed that the nib Group member support package is more than $45 million.  The package includes:

  • financial hardship premium relief
  • suspension options
  • pre-approval extensions
  • expanded coverage
  • Lifeline Aotearoa and Clearhead support

The procedures that have experienced the largest increase following the initial lockdown (relative to pre-pandemic claims activity) were:

  • Neurological: 116% increase
  • Cardio-thoracic surgery: 49% increase
  • Diagnostics: 38% increase
  • Gynaecological: 36% increase

“To date our nib Group member support package totals more than $45 million, and includes financial hardship premium relief, suspension options, automatic six-month pre-approval extensions and expanded coverage for COVID-19 related treatment at no cost,” he said.

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Insight into FSPR usage, and more daily news

MBIE has published a document covering adviser and FAP responsibilities under the new regime. The document first sets out the rules of engagement, stating that every adviser must be engaged or linked to a FAP. Advisers must ensure the FAP registers the engagement on the FSPR. But to link to FAPs, advisers must first provide the FAP with their name and FSP number.

 From 15 March, advisers must have these things before linking to a FAP:

  1. A RealMe® login
  2. An online services account with the FSPR
  3. Authority to update records on behalf of the financial advice provider

In order for advisers and FAPs to engage, FAPs must:

  1. Log in to your online services account using your RealMe ID and password, and locate your registration in the ‘FSP Registrations’ tab of your dashboard.
  2. On the ‘View FSP details’ screen, select the ‘Financial Services’ tab and click the ‘Maintain Financial Services’ button.
  3. Scroll down to the ‘Financial advice service’ where you’ll see the FAs, if any, that you’re linked to.
  4. Click the ‘Add Financial Adviser’ button and search for the FA you wish to engage, using their FSP number or name. Select the FA from the drop-down list, and indicate whether or not they will be covered by your dispute resolution scheme (DRS).
  5. Repeat step 4 above for each new financial adviser you add. Please note, multiple advisers are displayed alphabetically. (Cont.)
  6. When you’ve finished updating your registration, click on ‘Next Step: Declaration’. Review and confirm the declaration.
  7. Click on ‘Next Step: Review’. Review the information you have entered and tick the check box to confirm the information is true and accurate
  8. Click on the ‘Submit’ button at the bottom right of the screen.
  9. Viewing the FAPs financial services, you’ll see that the FAs now appear on the ‘Financial Services’ tab.

To support the new regime being implemented, the FSPR will also be updated. The Companies Office will release guidelines and videos to help users closer to the date.

This video shows the engagement process.

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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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The essentials for overcoming future catastrophes, and more daily news

Diana Clement wrote a NZ Herald article on the need for being prepared in case of unexpected circumstances. Clement highlights that we need to be mentally prepared for the occurrence of personal or societal catastrophes. Clement continues by noting that getting out of debt and having savings is essential to overcome future crises. The need for budgets is highlighted by using the events surrounding COVID-19. Steve Morris, a financial adviser at SW Morris & Associates notes that we would all benefit from using digital tools such as free digital tools for personal cashflow forecasting such as PocketSmith. Insurance is highlighted as being another essential thing for New Zealanders to have in place to ensure protection. Income protection, mortgage protection, trauma/critical illness, permanent disability, business interruption, medical, and life insurance are all mentioned, with Clement saying each offers different types of cover that are useful in different circumstances. Although insurance is deemed as essential, Clement concludes by saying that no insurance policy is completely fool proof.

“My usual New Year articles are all about the positive stuff and how you can turn your year around. But after 2020, let's talk about preparedness. That includes being mentally prepared for curved balls, having savings, and taking out insurance.

Mental preparedness. Do you have a plan for the next time the world turns to custard? Unpredictable (black swan) events such as the Global Financial Crisis and now pandemic, hit us every 10 years or so. We can have personal black swan events such as divorce, or illness. Financial adviser Steve Morris of SW Morris & Associates has seen an upswing in couples separating after lockdown. This can be financially crippling. He recommends getting help from organisations such as The Parenting Place before the relationship ends up on the rocks.

Savings. Getting out of debt and building up some savings is essential if you want to ride out the next financial crisis. If you're constantly a few weeks from financial meltdown then this applies to you. It's hard, but you need to change your thinking and create a budget. People can and do turn their finances around. Use Covid-19 as the financial catalyst to get you started.

In an ideal world you need three to six months living costs (not income) squirrelled away. Providing you are still able to work and willing, most people will find a job within that period.

The best tool for this is a budget. I know it sounds boring, but it's simple to write your first budget and the outcome can be truly life-changing. I follow a number of investing and get out of debt forums and see ordinary Kiwis celebrating cutting up their last credit card or beginning an emergency fund. Don't write it off. It can happen.

Morris also recommends using the free digital tools for personal cashflow forecasting from PocketSmith.

Insurance. The whole point of insurance is to cover yourself financially when unexpected events hit. That's insurance cover for your health, income, and property.

A variety of insurances can cover your income/outgoings. They include income/mortgage protection, trauma/critical illness, permanent disability, business interruption, medical, and life insurance (which often pays out if you're diagnosed with a terminal illness. Each covers different risks and it's a good idea to seek advice from a financial adviser. Everyone is covered by ACC for accidents, but you're more likely to become disabled by illness, and only qualify for Work & Income benefits if you don't have insurance. When insuring yourself, make sure you think about the non-working or lower-earning partner, says Morris. All too often a higher-earning spouse has to reduce hours to pick up parenting duties if the other spouse becomes ill, is disabled, or dies, says Morris. Trauma cover is very good in this situation because it usually pays a lump sum, he says.

Insurance is essential in our modern world, but no insurance policy is 100 per cent foolproof. Because the things you will claim on are unexpected, they could fall outside the policy wording.” Click here to read more

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Partners Life sets off on transparency route, and more daily news

Partners Life has begun the process of becoming more transparent by publishing a timeline of key events that would be of interest to customers. This step comes after the announcement by Partners Life CEO Naomi Ballantyne and chairman Jim Minto in September. Partners Life has shared information that wasn’t previously made public by Partners Life or other New Zealand insurers. Partners Life says that it is happy to make this information public. Information shared include premium changes, claims ratios, awards and launches.

“In late September, you may have seen Naomi and our Chairman, Jim Minto, interviewed by the press talking about Partners Life’s plans to publish a whole bunch of information on our website in the name of transparency.

Since then, we have been working away, trying to figure out the best way to make this important information not only accessible, but readable and interesting to clients, advisers and regulators alike, and we are very pleased to let you know that we have today launched the ‘Timeline’ on our public website. The Timeline can be found here.

The Timeline narrates all of the customer-centric events that have occurred within Partners Life dating back to our launch, including yearly recaps of in-force business levels, claims paid vs. declined ratios, capital raised and financial strength history, every product related change since we launched in 2011 (both positive and restrictive), every premium rates change since 2011 along with other events which might of interest to a potential client (such as awards and new technology launches)

There is a huge amount of information contained within the Timeline, much of which has never been publicly made available by Life Insurers in the NZ market before – we are happy to make this information public, because we believe our performance over the last decade absolutely speaks for itself, and think that this information will be of great value to the general public, and to your clients in getting comfort around who Partners Life are, and what we believe in.”

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Cigna’s Gail Costa reflects on 2020 events and responses, and more daily news

Cigna NZ CEO Gail Costa shared her views on the importance of being prepared for change and adapting to unexpected change. In her opinion piece, Costa mentions how proud she is of the resilience shown by advisers throughout the lockdown periods last year. Costa highlighted the common shift out of comfort zones for many advisers as well as the increased used of digital tools such as online applications and digital calls. Costa noted the continued use of Cigna’s digital application platform. Costa also noted that the pandemic pushed people to realise the importance of being protected, with advisers working to help people understand what covers they had in place and what protection they could get. 

“Last year has tested the resilience of us all. Despite its challenges we’ve worked together and continued to support our customers from our make-shift offices. On top of that we’ve home schooled, looked out for our loved ones and managed stresses, whether that be in our work or personal lives.

 

I’m proud of the resilience shown by the adviser community who quickly adopted to new ways of working to ensure our collective customers would be taken care of as they too grappled with the uncertainty of the pandemic. For many advisers, last year saw them step out of their comfort zones and embrace new ways of doing business.

 

From May to June we saw digital applications more than double and usage levels have remained consistent ever since. What also became apparent was that some advisers are now either completely using video calls in lieu of face-to-face appointments or they have at least become a major part of their sales process. This is great to see as keeping on top of changing technology will enable us to continue to meet the changing needs of New Zealanders.

 

The uncertainty of the pandemic saw increased awareness among New Zealanders about the importance of being protected. As people became increasingly concerned about potential impacts of the pandemic on their work and family lives, the critical role of advisers to help people understand what they were covered for and the options available to them was made clear. Countless service hours were put in by advisers during this time to ensure that their customers continued to be well protected and their new customers were getting the right cover to meet their needs.”

Costa concluded by saying that the engagement Cigna had with advisers has provided insights that will help further improve products. The change in core product pricing and the simplification of policy wordings are examples of the changes being made. 

“Our engagement with advisers throughout the year provided invaluable insight into where we can make enhancements to our products. As a result we’ve rolled out a number of changes including more sustainable pricing on our core products, enhancing our definitions to and we’ve started introducing plain English policy wording. It has been great to hear how this has been received and gives us confidence that we’re moving in the right direction.

As we look ahead to 2021, one premise underpins all of our plans, we’ll continue looking for new opportunities to ensure our product and service offering remains sustainable to protect the long-term needs of New Zealanders.” Click here to read more

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Asteron Life: in the coming weeks Asteron Life is set to inform advisers about:

  • Consultation on the proposed new distribution agreements
  • Asteron Life product accreditation requirements
  • Confirmation of FAP licensing arrangements
  • Information to support in adviser complaints management processes

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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

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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

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Partners Life knowledge assessment, and more daily news

Partners Life has announced the development of a knowledge assessment to meet the competence requirements set by regulators. All advisers with Partners Life agencies will be required to undergo a knowledge assessment. Depending on the results of the initial assessment, advisers may be required to complete refresher training. Partners Life have noted that the assessment will not be a test of product features, instead is intended to ensure advisers provide suitable advice. The assessment will be based around the circumstances of a hypothetical family. This is intended to make the assessment more realistic.

“To meet the competence requirements set by the regulators, every adviser holding a Partners Life agency will be required to complete an initial knowledge assessment, as well as any subsequent refresher training that may follow.

The Partners Life philosophy is focused on professional development rather than just product accreditation. This means our knowledge assessment process will not just be a memory test of product features but will focus on helping advisers to deliver suitable advice. We believe that personalising assessments by including a fictitious family with their own circumstances, will make assessments more realistic, more relevant and more likely to support advisers deliver results that lead to good customer outcomes.”

The assessment will be completed online and is designed to be straightforward. Advisers will be provided with login details and will have the ability to store their personal records. As part of the initiative, Partners Life will provide advisers with additional professional development resources. Managing Agencies and FAPs will have the ability to oversee the progress of advisers.

“Partners Life has developed an intuitive online learning platform to ensure that the process will be straightforward. It provides each adviser with a unique login and the ability to store a personal record of their Partners Life learning.

As an added bonus there will be other professional development resources available to advisers through the portal.

If you are a Managing Agency or Financial Advice Provider licence holder, you will have the ability to view the progress of any sub-advisers or members.  It is therefore critical that you keep Partners Life up to date with any adviser changes in your business, so that our records are always accurate and current.”

Partners Life is set to send advisers emails with their usernames and a link to generate passwords. There are 10 modules for advisers to complete, with each module estimated to take 20-40 minutes to complete. All advisers will be required to complete the initial knowledge assessment before 26 February 2021.

“You will shortly receive an email with your username and a link to create your password that will give you access to the initial learning platform. The recorded introduction video has some tips to help you navigate through the process and we would strongly encourage you to watch the video before you start the assessments.

There are 10 modules to complete and we estimate it will take you between 20 and 40 minutes to complete each module. All advisers must have the initial knowledge assessment completed by close of business Friday 26 February 2021.”

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