Aon look to acquire Willis Towers Watson, and more daily news

After announcing its acquisition plans in March 2020,  Aon has submitted an application to the Commerce Commission to acquire Willis Towers Watson. Aon is looking to incorporate the five Willis Towers Watson offices across the country into wholly owned subsidiaries.

“New Zealand’s Commerce Commission has received Aon’s clearance application to acquire the entirety of Willis Towers Watson, as part of a global transaction.

The step was revealed by a statement from the commission, which is New Zealand’s competition, consumer and regulatory agency.

In New Zealand, Aon and Willis Towers Watson both offer a range of insurance brokerage services, including for commercial insurance, reinsurance, group health and welfare benefits, and personal and life insurance. Both firms also provide investment consulting services to institutional investors.

Aon has 58 offices across New Zealand, while Willis Towers Watson has five – Auckland, Wellington, Christchurch, Tauranga, and Dunedin.

Under the proposed transaction, Willis Towers Watson will become a wholly owned subsidiary to Aon. According to the Commerce Commission, it gives clearance to a merger application if it is able to successfully prove that that the deal is unlikely to have the effect of substantially lessening competition in a market.” Click here to read more

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AMP KiwiSaver scheme to go passive, and slash fees

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AIA introduces claims management service, and more daily news

AIA has announced the launch of AIA 360, a free claims management service that is on offer to eligible IP customers. AIA currently spends over $1.1 million annually to assist customers on disability claims and has 26 case managers assigned to 1,300 cases.  This averages to 45 cases for each case manager. Chief Customer Officer Sharon Botica has said AIA is able to improve processes and offer better support with AIA 360.

“The insurer is launching AIA 360, which is described as "a personalised end-to-end claims experience providing support, guidance and rehabilitation."

The programme will be available to eligible income protection claimants and is offered free of charge.

Currently the company spends more than $1.1 million a year helping people on disability claims. It has 26 case managers looking after 1,300 rehabilitation cases.  This is about 45 cases for each case manager.

"We keep these numbers low so we’re able to provide a good level of individualised and tailored care and support to each customer," AIA chief customer officer Sharon Botica says.

She says the programme will provide support and guidance throughout the claims journey.”

Advisers will be able to offer customers support during the digital claim process. Although the service is currently being offered to those making IP claims, AIA is looking to expand the service offering in the future.

“Botica says will the company is trying to digitalise many of its processes, DI claims management requires the personal human-to-human touch.

"People are in a very vulnerable position when they claim," she says.

Botica says advisers will be able to give clients comfort that if they have to make a DI claim, there is a full service to support them.

360 Care will give clients confidence at claim time, she says.

360 Care is an evolving claims experience that will be available to more claimants in the future.” Click here to read more

In other news

Cigna: David Haak appointed as new General Manager – Distribution

Professional IQ: Advisers find “unexpected benefits” from completing Level 5

Strategi: AML compliance update webinar

FMA: World Investor Week live Q&A webinar

FSC: Financial Services Council  Annual General Meeting 2020

Partners Life: transparency, trust & the right thing to do webinar


Financial adviser network raises capital and more trends in digital for advisers

The XY Adviser network (https://www.xyadviser.com/) is a popular place for financial advisers to trade news, talk about events, and get help and support. I know several New Zealand-based advisers that love the forum and have learned many useful new ideas from their peers through it. Other groupings, collegiate groups ranging from informal breakfast clubs, through service networks, to LinkedIn groups abound. But the shift to digital broadens the reach of networks considerably. Network effects mean that the bigger the network, the more valuable it is. Hence, the profound impact digital is having on adviser businesses. Two trends are moving in parallel - from installed software to web-based systems, alongside formal knowledge sharing in person to digital knowledge sharing in an informal context. Those changes in digital are having real-world effects: adviser businesses are able to access software solutions from around the world with more confidence due to the reference expertise that these social networks provide. One kind of growth creates another: XY is in the process of raising capital, such are the demands on their services. 

If the world of adviser technology interests you, do join me, with David Greenslade of Strategi on the FSC Get In Shape series hosted by Mark Banicevich. We're talking about all things adviser technology tomorrow at 10am. Here is a link to the events page on the FSC website: https://www.fsc.org.nz/Events.html if you would like to register for the webinar. 


FSCL complaint foreshadows implications of non-disclosure, and more daily news

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


Adapting adviser businesses to accommodate vulnerable clients, and more daily news

Strategi Group recently released their white paper on vulnerable clients, they are now urging advisers to have processes in place to better accommodate vulnerable clients. It is especially important for advisers to update processes and procedures as a significant number of current clients could potentially become vulnerable clients as a result of COVID-19. Similarly, clients may have already become vulnerable clients. 

“Strategi Group has urged financial advisers to ensure they have “adequate policies, processes and practices” in place to assist vulnerable clients, as the COVID-19 pandemic has had a severe impact on financial health across the globe.” 

Strategi highlighted the different factors that could hinder clients and have them fall in the vulnerability spectrum. Common hindrances faced by New Zealander include literacy difficulties and mental health disorders. With one in four New Zealand adult facing literacy difficulties and one in six New Zealanders living with common mental health disorders. In the current environment, existing money and job security concerns will be amplified. With unemployment rising, Strategi suggest advisers adopt a more holistic approach in all aspects of their business. 

“In its recently released white-paper, Strategi explained that vulnerability has many faces - one in four New Zealand adults have literacy difficulties, while one in six are diagnosed with a common mental health disorder. In a 2018 report, it was revealed that 68% of people reported money worries while 47% were concerned around job security - figures which have likely risen significantly over the past months.

 

With unemployment set to rise and vulnerability likely to rise with it, Strategi says advisers need to take a “holistic approach” to delivering good results.

 

“Vulnerable clients need to be considered throughout the whole client journey, and in all interaction,” Strategi states. “This includes from how you design products, through to how advice is delivered.”

 

“One of the essential features of delivering good outcomes for vulnerable clients is ensuring staff are well trained to identify these clients in the first place,” the report continues.” Click here to read more

In other news:

PartnerRe: PartnerRe hires new CEO as net income dives

Non-banks get Covid boost

 


Greater effects of unemployment, and more daily news

RBNZ released its unemployment report to understand if unemployment in one region of the country could influence unemployment in different regions. Upon completion, RBNZ found that unemployment in one region does affect unemployment in other regions although the impact varies. It was found that unemployment in Auckland and Waikato has the biggest impact on other regions while unemployment in Taranaki and Southland have the least impact.

“The paper finds rising unemployment in Auckland and Waikato has the biggest impact on unemployment around New Zealand. In contrast, rising unemployment in the Upper South Island, Southland, and Taranaki generate few spillovers into other regions.”

RBNZ has determined that the information in this report can assist in setting and amending future monetary policies to support employment in New Zealand. Similarly, the identification of regions with greater impacts will help in the improvement of unemployment forecasts.

“The modelling indicates that regions with the largest spillovers can be used to improve the accuracy of national unemployment forecasts.

This can help inform the Reserve Bank when it sets monetary policy to achieve its mandate in supporting employment in New Zealand.” Click here to read more

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Fidelity Life: Sharecare August challenge allows user to go into the draw to win a 'Winter Wellness' bag from My Food Bag worth $189.99 if they earn 20 Green Days over a 30-day period

Fidelity Life: Sharecare August challenge walk into winter gives puts users in the draw to win a Fitbit Versa 2 worth $359.99

Fidelity Life: Premium changes for some income protection cover, Key Person Cover and for new level trauma (including Trauma Multi) covers effective from 1 August

Strategi: Whitepaper - Vulnerable clients

RBNZ: Introduction of Bill marks exciting new phase for Te Pūtea Matua