Asteron Life has made changes to premiums effective 21 September 2020. The introduction of premium increases has been in response to claim costs being higher than expected. The premium increases will only impact customers on a stepped premium. Depending on customer segments, increases will be between 0% - 6%. Please refer to the table below. 

“These increases are in response to higher than expected claim costs observed in our most recent claims experience review. Based on this, we have adjusted our long-term claims outlook and updated premiums to ensure that our business will remain sustainable to support our customers both now and in the future. We perform regular reviews to keep any increases small, and as manageable as possible for customers.”

The new rates will not apply to quotes created before 21 September, but the quotes will be valid for only 30 days. The premium changes will affect existing customers after their next policy anniversary or after 21 October 2020.

“The new rates will apply for new customers from 21 September 2020 and will be reflected in policy documents. Quotes created before 21 September will be valid for 30 days.

The changes will apply for existing customers from their next policy anniversary on or after 21 October. Customers will not see any specific reference to the change in rates, but renewal notices will continue to mention that premiums can increase due to changes in market conditions.”  

The increases are higher, generally, for female lives than for male lives in trauma. They are also higher for both younger lives and older lives, across all product types, while the changes for lives at the main ages of acquisition (between about age 35 and 50) are more limited, probably constrained by competitive pressures. More details will be given in the forthcoming quarterly life and health report. 

In other news

Southern Cross: AA Insurance and Southern Cross recognized for diversity efforts

Southern Cross: Coronavirus: Did lockdown actually make some of us happier?

nib: nib outlines strategy of 'data-driven personalisation'

FSC: register for Generations 2020 digital pass

Southern Cross has reported a surplus of $32.4 million for the year ended 30 June 2020. This financial reporting comes after the $50 million return to members. $972 million was returned in claims in the last financial year, this equals to 85 cents in claims being returned for every dollar received in premiums.

“Southern Cross Health Society Group has today released its annual financial results, posting a surplus of $32.4 million for the year ended 30 June 2020.

The announcement follows Southern Cross Health Society’s pledge during the Level Four lockdown in April to return $50 million to its members.

In the last financial year, the Society returned $972 million in claims and received $1.138 billion in premiums.

For each dollar received in premiums, it returned 85 cents in claims to members, compared with an average of 62 cents in the dollar among other New Zealand health insurers.”

“The business paid out 72 per cent of all private health insurance claims, significantly more than its 62 per cent market share based on Health Funds Association of New Zealand data.

Nick Astwick said that Southern Cross was focused on members during the last financial year. This included pledging to return $50 million, setting up employees to effectively working from home and ensuring the business digitisation process is on track.

Chief Executive Nick Astwick said the Society’s focus during the last financial year was on taking care of its members: “We were with our members from the start of the pandemic, returning $50 million to them, and introducing a significant range of options for those in need of hardship relief.

“At the same time, our workforce was very quickly set up to work remotely, ensuring service levels were seamlessly maintained.”

Astwick said cost-saving digitisation of the business had continued at pace, with 82 per cent of customer channels now fully digitised, and more than 96 per cent of claims submitted digitally.” Click here to read more

In other news

Southern Cross: Woman who lives in fear of jaw dislocation determined to get replacement

Southern Cross: Southern Cross gives support to students' mental health programme

AIA: Depressed man wins $173,000 battle with insurer AIA - there will be more discussion of media claims coverage in the forthcoming quarterly life and health sector report. 

Southern Cross Travel Insurance has announced that it will be offering customers domestic travel insurance product.

Customers will be offered:

• Cover for cancellation of your flight and accommodation if you can no longer travel
• Cover for accommodation and other expenses if your flight is delayed or cancelled
• Cover for your luggage and other personal belongings if they’re stolen or damaged
• Cover for excess charges if you have an accident in your rental vehicle
• Cover for the kids if you’re delayed getting home and need to pay for extra childcare costs
• Cover for your furry friends at the kennels if you’re delayed getting home

Click here to read more

In other news

Kiwis with advisers end up significantly better off - research

AMP Australia: AMP advisers call for government inquiry over alleged fraud, deception

After speaking with an adviser a woman proceeded to cancel her $300,000 policy and add a trauma/critical illness policy. After suffering a back injury a month after making the changes, the woman’s claims were denied.

“The woman met with an insurance adviser to review her cover – she already had a $1 million life insurance policy with one insurer and another $300,000 policy with another, but no trauma, critical illness or mortgage replacement cover.

The adviser recorded that she was working 28 hours a week as an accountant in her own company and studying part-time.

It was recommended she combine her life insurance policies with one of the existing insurers and cancel the $300,000 policy. The adviser also said she should include some trauma or critical illness cover and mortgage protection cover in case she could not work for a period of time.

The woman accepted the adviser’s recommendations. She cancelled the $300,000 policy and a new policy providing cover for trauma/critical illness commenced in October. In November she tripped and fell, injuring her back.”

When speaking with the adviser the woman noted that she worked 28 hours and studied part-time, when claiming she told her insurer that she worked 30 hours a week and informed ACC that she worked 40 hours a week. Her insurer discovered that she wasn’t  working and instead was a full-time student. The woman proceeded to lodge a complaint against the adviser stating that she wasn’t informed that she would need to provide financial statements and a result of the advice she’s cancelled her $300,000 policy.

“She submitted a claim under her trauma/critical illness insurance, stating that she had been working as an accountant for 30 hours a week. She also stated on her ACC form that she had been working for 40 hours a week.

When the insurer asked for documents to corroborate her income, she was unable to provide convincing information. The insurer then discovered that she was a full-time student. The insurer declined the claim and voided the new insurance policies but later reinstated the $1 million life policy that she had before the changes were made.

The woman complained that the advice she had received from the adviser caused her to lose the $300,000 life insurance policy that she had cancelled on the adviser’s advice. When the complaint was not able to be resolved directly with the adviser, she went to FSCL.

She told the dispute scheme the adviser had not told her she would have to provide financial statements to support any claim.”

Although the FSCL concluded that the advice given was sound advice, the chain of events highlights the importance of risks of non-disclosure.

““We were satisfied that the advice to increase the cover with one insurer and cancel the smaller policy was sound advice and had not caused any loss,” FSCL said.” Click here to read more

Advisers reading the reports will notice inconsistencies and gaps. The story is plainly larger and more complex than is being shared. As such, there is no real basis for making form judgments. In more general observations we should probably note the increasing likelihood of client complaints and the difficulty of managing disclosures - making sure that clients are really clear about the importance of accurate disclosure and helping them to achieve that - for their benefit and ours. After all, complaints just cost us all money and reputation. 

In other news:

Southern Cross: a Risk Partner – Sales and Marketing role is currently being advertised

Strategi: Strategi are offering remote AML/CFT audits

RBNZ: Reserve Bank extending mortgage deferral scheme

RBNZ: Monetary Policy Statement Explained Q&A with RBNZ Chief Economist and External MPC Member

FMA: Sorted Money Week has begun

The FMA has revealed that although 400 entities have registered on the FSPR at the companies office to become a FAP, none have initiated the next steps in the process.  During an FSC webinar, John Botica mentioned that an adviser who had received a confirmation email from the Companies Office had mistaken it as receiving his transitional licence. John Botica has urged advisers and groups to follow the application process and assess where there are closely to avoid consequences in March 2021.

“Financial Markets Authority director of market engagement John Botica said there were about 400 entities that had registered for the FAP service with the FSPR but had not yet gone on to the next step.

He told an FSC webinar that he spoke to one adviser who thought that his transitional licence had been granted but he had only received notice that his registration with the Companies Office had been successful.

He said those 400 entities should check back through their processes to see where they were at.

Otherwise they could be in for a nasty surprise next March, he said. “I don’t think you’re going to like the experience if we are rapping on your door [for] operating without a licence.” Click here to read more

In other news:

FSC: Dr Siouxsie Wiles, Microbiologist & Associate Professor MNZM has been announced as the closing keynote for Day 1 of Generations Conference

AIA: AIA has been nominated as Insurance Employer of the Year at the Women in Insurance NZ Awards 2020

Southern Cross: Southern Cross has been nominated as Insurance Employer of the Year in Insurance NZ Awards 2020

It was announced that AIA will host an online health and wellness event, AIA Live, on August 2 2020 from 2 pm to 10pm. The event will be focused on mental wellbeing, exercise, activity and rest, nutrition and personal growth while also incorporating music and comedy into the sessions. AIA Life is set to solidify AIA’s commitment to encouraging healthy living. 30 sessions will be running during the event to appeal to people of all ages and in different regions.

“AIA, the largest independent publicly listed pan-Asian life insurance group, today announced plans to host its first ever regional online health and wellness event, spanning 13 markets and headlined by AIA’s Global Ambassador David Beckham.

AIA Live will be broadcast on Sunday 2nd August and will include more than 30 unique sessions, delivering health and wellness content to inspire, motivate and educate people across the region as part of AIA’s commitment to helping them live Healthier, Longer, Better Lives. Key themes will include mental wellbeing, exercise, activity and rest, nutrition, personal growth, as well as light-hearted moments of music and comedy.

AIA Live has been designed to appeal across all age groups and multiple markets, celebrating the cultural diversity of the region while at the same time bringing people closer together to deepen their knowledge of health and wellness in a fun and engaging way.”

Although registration is required, AIA Live will be hosted on AIA’s Healthy Living YouTube channel. This event allows AIA Vitality members to earn points. As part of the event AIA New Zealand ambassadors Ian Jones and Jess Quinn will be hosting activities. Jess Quinn will be running a body image workshop while Ian Jones will be holding a HIIT workout session.

“AIA Live will be hosted on AIA’s Healthy Living YouTube channel and AIA Vitality members will be able to earn AIA Vitality Points for taking part. By registering for the event, participants will also earn the chance to win significant prizes including trips to London to watch Spurs play and meet their first team players, as well as signed footballs from David Beckham, virtual cooking lessons with Jeremy Pang, and merchandise from our other ambassadors. AIA also plans to host similar days in China and India in early September, with tailored content for those markets.

AIA Live will be broadcast in New Zealand on Sunday 2nd August from 2PM-10PM. As part of the event, AIA New Zealand ambassadors Jess Quinn and Ian Jones will be taking part with Jess running a body image workshop and Ian demonstrating an at-home High Intensity Interval Training (HIIT) workout.” Click here to read more

In other news:

Kiwibank: Thousands of Kiwibank customers caught up in privacy breach

Southern Cross: Health screenings 101

AMP: KiwiSaver Still Attractive In ‘retirement’

With regulatory changes finalising, the industry is working to adjust. This has resulted in a number of changes being contemplated as well as being implemented. Dealer groups have had to reconsider may aspects of their business to ensure that they are prepared for the upcoming changes. One potential change is the acquisition of a group by another.

“In the past week rumours started swirling around the market that one of the bigger groups was about to takeover/merge/acquire one of the mid-size groups.”

The impending changes to the current law has meant changes to Newpark have had to be made. Newpark is expected to announce changes to their model towards the end of next month.

“Meanwhile, Newpark is regrouping its army, but how big it will be after Partners Life new FAPO model where override commission is paid to FAPs is unknown.

Good Returns understands that Newpark will be announcing its new model around August 23. If Covid-19 hadn't rolled its dice and pushed licensing back a year it's questionable if the group would still be on the board.”

Alongside making changes to align with new regulatory standards dealer group must work to ensure that they offer advisers attractive membership services.

“For advisers there is a growing imperative to ensure they find a group that fits with their own beliefs and business practices.

For dealer groups the pressure is coming on to deliver appropriate services to their members at the right price points.”  Click here to read more

In other news:

FSCL: Dispute service sees complaints rise by 40%

Southern Cross: Insurance companies among finalists for awards championing diversity

FANZ: Trusted Adviser mark attracts “strong and supportive” feedback

Commerce Commission: Commerce Commission release advising the Court of Appeal issued a ruling in the case regarding Harmoney’s lending model. In a judgment issued on 8 July the Court said that: Harmoney Limited is a creditor, its contracts are consumer credit contracts which are subject to the requirements of the CCCF Act, its platform fee is therefore a credit fee that is required by the CCCF Act to be reasonable. 

The availability of health insurance for transgender individuals was brought forward to the Finance and Expenditure Committee in June 2019 in the form of a petition. Elizabeth Poucher, the driver of the petition, stated that transgender women are unable to get the same level of cover as cisgender women.

“Elizabeth Poucher brought a petition asking for the House to conduct an inquiry into the availability of health insurance for transgender people's care related to transitioning.

She said that transgender people were often unable to get cover for things such as breast cancer, which were affected by hormone treatment, although a male-to-female transgender person was no more at risk than a cisgender woman. Poucher said that while people could sometimes get cover for other pre-existing conditions if they were willing to pay a premium loading, that was not the case for transgender people.”

In response, Roger Styles, Health Funds Association CEO has said that insurers look to offer affordable products and that transgender care was often excluded due to high costs associated with transitioning. For this reason, Styles says that exclusions are not discrimination against the transgender community.

“Health Funds Association chief executive Roger Styles said insurers had to be able to offer an affordable product that was appealing to people to voluntarily purchase.

Transgender care was excluded because of the high cost of the transition process, he said, and the risk of adverse selection. People who thought they might transition would take out cover that would pay for it, loading insurers with extra risk.

He said insurers did not agree with Poucher that this was discrimination.” Click here to read more

In other news

AA Insurance: AA Insurance is a finalist in 2020 Diversity Awards NZ

Southern Cross: Southern Cross celebrated Matariki

RBNZ: RBNZ announced that it will publish data from the Credit Conditions Survey for the June 2020 quarter on Tuesday 14 July. Usually run biannually in March and Sept, the Credit Conditions Survey asks banks qualitative questions about changes in credit conditions in bank lending markets. The RBNZ decided to conduct an interim Credit Conditions Survey for June 2020 to understand how domestic credit conditions have changed post-lockdown.

Cigna: David Haak has joined Cigna.

Southern Cross commissioned a study to understand the overall wellbeing of New Zealanders. The health of over 3,000 New Zealanders was examined in the study. The research was conducted during Level 4 and 3 so the implications of COVID-19 on the health of New Zealanders were examined.

“The Southern Cross Healthy Futures Report, conducted in partnership with Colmar Brunton, sought to track the physical, emotional and social health of more than 3,000 New Zealanders. Research began in 2019, but the survey period encompassed the Alert Level 4 and 3 lockdowns, giving insight on how these events affected the nation’s psyche.”

Some of the results of the study have be revealed and have indicated that COVID-19 had a positive impact on the health of participants. When compared to pre-lockdown, the sleep hours of more participants increased, feelings of loneliness decreased, the sense of belonging and connectedness increased, and physical activity increased.

“The research’s preliminary findings, ahead of its full release this month, indicated that the slower pace of life resulted in more people feeling that they were getting enough sleep – from 46% prior to lockdown to 61% during the lockdown. The average hours of sleep increased from 6.97 hours to 7.29 hours, meaning more New Zealanders were able to meet the recommended range of seven to nine hours of sleep.

Despite being isolated physically from friends and family during lockdown, the study found that feelings of loneliness decreased by 8%, as did concerns of being a burden on others – from 41% to 34%. According to the study, Kiwis also experienced a greater sense of belonging and connectedness to their community, up from 44% to 49%.

Physical activity also increased, with 60% of respondents considering themselves physically active, up from 52% before the lockdown.” Click here to read more

That was surprising to me, because it wasn't my experience, but on reflection, and after discussion with others, I can see how that would have been the case for many people. My own experience was a lot more work, less exercise, and less sleep. I get a lot of incidental exercise from going to appointments - so endless zoom meetings knocked a lot of that out. Also, I was one of the people where work got busier, not quieter, as lots of new data needed to be collected, people to be interviewed, policy changes had to be made at insurers, and new planning concepts had to be developed. Having said all that, the experience for others was more likely to be more common - and I shared some of that too - the idea of a shared challenge (COVID-19) and the need to respond. 

In other news:

Partners Life: Naomi on Premium Increases

AIA: 2020 Top Insurance Workplaces revealed

Internal affairs have reported that Cabinet have agreed to introduce an amendment to the current AML/CFT Act on 31 December 2020. All reporting entities will be required to have an independent audit completed every three years instead of every two years.

“Cabinet has agreed to introduce a new regulation to extend the default time frame for AML/CFT independent audits from two years to three years. The implementation of these regulations is the responsibility of the Ministry of Justice and until the new regulation comes into force reporting entities must comply with the current obligation to complete an independent audit every two years.”

As a result of the change in regulation, the following expectations have been set in place:

“The Ministry of Justice advises us that they propose to have the new regulation in force by 31 December 2020. This would mean: 

• Law firms, conveyancers, and new Trust and Company Service Providers are required to have their first independent audit completed by 30 June 2020. i.e. no change to the current timing.

• Accountants and bookkeepers are required to have their first independent audit completed by 30 September 2020. i.e. no change to the current timing.

• Real estate agents’ first independent audit would not be due to be completed until 31 December 2021 i.e. the independent audit due date for real estate agents would be extended from 31 December 2020 to 31 December 2021.

• For any reporting entity that has already completed its first or a subsequent independent audit when the new regulations are implemented, it will have three years from the date of the last independent audit to complete the next one.” Click here to read more Audit Guideline

In other news:

AIA: HealthScreen service has resumed

Privacy Bill: The Privacy Bill third reading was completed in Parliament under urgency in a continuation of the 24 June Parliamentary session, with the Act coming into effect on 1 Dec 2020. The NZ Herald reports the key provisions as:

• Mandatory notification of harmful privacy breaches
• Introduction of compliance orders
• Binding access determinations - If an organisation or business refuses to make personal information available upon request, the Commissioner will have the power to demand release
• Controls on the disclosure of information overseas
• New criminal offences
• Explicit application to businesses whether or not they have a legal or physical presence in New Zealand

Financial Advice NZ: Bring in the Experts: Disclosure Requirements with MBIE webinar

Southern Cross: Southern Cross supports new safe haven for at-risk pets

RBNZ: Reserve Bank welcomes new funding agreement