AIA digital makeover driven by COVID-19 crisis, and more daily news

Sam Tremethick, AIA distribution executive, revealed that AIA is in a better position now that it was a year ago. This has been credited to people being more risk averse and understanding the need for protection.

“When New Zealand went into the first lockdown, AIA settled into a period of big business and even bigger change. Since then, innovation and technology have reshaped the way that the business functions.

AIA distribution executive Sam Tremethick told Good Returns that like a lot of industries AIA took a hit in the April/May period, but quickly bounced back to a point where “year on year as of today we are doing better than this time last year”.

Tremethick attributes the rise in the insurance business to “a direct result of people being more risk averse than normal and just being conscious of the need for protection”. But along with a rise in business came a chance to reshape their processes for the company that during lockdown shifted to being almost 100% of staff working from home."

Sharron-Moana Botica, chief customer officer, said that understanding how to offer advisers support during lockdown was key. Last August’s launch of AIA hub resulted from adviser feedback and has been continuously enhanced. The current platform, eApp Share, is described as revolutionary. Through the use of eApp, margins of error have been minimised, application times has been accelerated, and customer experience has been improved. The introduction of eApp has also allowed AIA to reflect on processes and current practices. Currently, 75% - 80%  of all applications are submitted through the app, AIA is considering whether to move the application process solely to eApp.

“AIA chief customer officer Sharron-Moana Botica said that during lockdown, figuring out how to support advisors was key. “In August last year we launched our new online platform AIA hub into the New Zealand market. But when you have a digital tool you always need to be enhancing it. So this latest development is what we call eApp Share.”

eApp Share is a tool that may prove revolutionary for advisers. Botica said that the digital program “was developed in response to feedback from advisers who wanted to continue the collaborative process of filling out an application.” Collaboration is key to the program which allows the adviser to push out documents to the client, the client to fill out the disclosures in their own time, and for the conversation to continue between client and advisor during the entire process.

Moving the processes online have also meant huge strides forward in narrowing down margins of error. While paper applications have a 30% error rate, the eApp Share program’s internal validation systems have managed to remove the bulk of these errors. This is because the system prompts users to submit accompanying information and the forms show where information is required before they can be submitted.

It has also increased speed, whereas paper applications took around five days, the digital system has no such reliance on printing, scanning and signing. Typically it takes customers between 10-30 mins to complete their part of the eApp form.

Botica says as well as improving the customer experience, eApp Share has aided AIA internal systems. “It helps us to look at what are the types of disclosure that are coming through. We can do a lot of analytics on our underwriting and the types of question sets that we use.”

With 75-80% of applications now processed through the eApp system it looks like it is here to stay. On whether we could see AIA moving to a 100% eApp system any time soon Botica said that “we are in conversation with their advisers on the ground. Becoming more digital is part of our future, not only in the business space but also in our servicing and claims side.” Click here to read more

In other news

Suncorp New Zealand a finalist for Sustainable Business Awards

AIA: AIA awarded Insurance Employer of the Year in NZ Women in Insurance Awards

FSC: Get In Shape Session 9  - Risk Management and Implementing a Risk Framework in your Business

Financial Advice webinar: Unlocking the Code in the New Financial Advice Regime Part 2


DAILY NEWS: Unpacking Minister Faafoi and Financial Advice NZ webinar, and more stories

During the Financial Advice NZ webinar, Minster Faafoi spoke about his commitment to ensuring that the conduct bill progresses while also highlighting that he is conscious of the importance of having enough lead-in time. During the webinar, the Minister spoke of how the Government understands that commissions are a legitimate way of paying advisers and as a result, the Government isn’t seeking to ban commissions, instead is looking to end target-based incentives. 

“In a webinar with Financial Advice NZ, Faafoi acknowledged that concern and said he did not want the conduct regime to add another layer of complexity of regulation on top for advisers.

The bill in its current form also allows regulations to dictate remuneration structures, which some industry participants have expressed concern about.

Faafoi said Government recognised that commissions were a legitimate way of paying advisers for their “important work” because consumers were generally unwilling to pay for financial advice. He said the Government was aware that commission structures were the way the sector had operated for decades.

“It is not the Government’s intention to ban all commission.” Click here to read more

It would be a great relief to advisers and insurers if it could be clearly discerned from the Bill that the power to ban commissions is reserved. At present the definition of incentives in the law can be read as including all normal commission payments, which is unnerving when long-term decisions need to be made. 

In other news:

Suncorp: Kate Armstrong joins Suncorp’s NZ boards

Suncorp: Suncorp earmarks further NZ$2 million for hardship fund

FMA: Transitional licensing continues at a “steady rate” despite COVID-19 delays – FMA

AIA: AIA new business value slips 27% after coronavirus disruption

 


Sorted sees the silver lining in huge increase of traffic

Sorted has had a big spike in traffic. Reported in Goodreturns, the focus in that article is on the demand for advice. That is true. The nature of the traffic also highlight the grim economic news: the most-used areas of the site were the mortgage calculator and the budget planner. But to return to the subject of advice, more than ever an holistic approach to financial advice is probably in demand now. We could do with a lot more capacity in this area - which currently is limited to AFAs. If you are an RFA, with relevant competence to offer financial planning, I suggest getting your transitional licence for the new regime and formalising your offer. It is needed.

Sorted: New Zealanders hungry for advice, Sorted says

In other news:

Fidelity Life: Fidelity Life makes board appointment

OBITUARY: Janet Brownlie

Suncorp: There is “no urgency” to return staff to offices - Suncorp

Pandemic risk mitigation and environmental policies go hand in hand


Cigna unveil product enhancements and new quoting software

Cigna has unveiled their new quoting software that allows advisers to generate quotes in real-time. Additionally, Cigna is looking to improve Assurance Extra, Business Assurance, Business Extra, and Agribusiness Extra product suites.

“Cigna New Zealand has rolled out a new online quote tool for its insurance advisers - the first in a series of planned improvements to help advisers work more efficiently.

CEO Gail Costa says the tool will allow advisers to obtain quotes in real time, giving them access to Cigna’s most up to date plans and pricing. It will also allow them to access both personal and business products at the same time.”

Gail Costa provided further insight about the software by stating that:

“This is a new kind of technology used for quotes, and it is an intuitive tool that uses all of the latest user experience ideas,” she explained.

“It also plugs into the medical database, and this makes it much easier for advisers to get accurate quotes for their clients, and also identify any other benefits they may need.”  Click here to read more

In other news:

Australia: ASIC cracks whip on three financial advisers

Suncorp: Suncorp reveals results and pandemic hit

Back to the office on Thursday (if you want)

Advisers complain about narrow rebate time limit

FMA: Cyber-resilience in FMA-regulated financial services


Asteron Life adds shield to website to aid victims of domestic abuse

Suncorp, Vero and Asteron Life are now part of the "shielded Sites" network. Shielded sites is an initiative aimed at helping New Zealanders experiencing domestic violence to safely gain support. Visitors to the websites are able to click on the Shielded Site icon to access information that can help them live a violence-free life without websites being visited showing in their browser history. This is a great initiative - ideally almost every high-traffic consumer site will do this, so people trapped in households with domestic violence and controlling family members will be able to see how and where they can get help safely. Click here to read more. 


Australia: Banks and their Insurance Businesses

 

Updated post: 

Although I have a convention of tagging news from Australia in the headline, this post has a great deal of relevance to our market, as it accounts for the fact that insurers representing nearly half of the market are for sale. The AFR has a detailed piece which I will make a few quotes from below, but you can find at this link, on why they think that banks owning insurance companies has become a headache - hence the rush to sell them. First, the AFR says that the news CommInsure was for sale was greeted with indifference by the market because of the 'state of the industry, which has been hammered by rising lapse rates and more lately, soaring claims'.

Obviously, the situation in Australia has been quite different for a number of insurers, to the experience of the same brands in New Zealand. Sovereign is not CommInsure, Asteron Life in New Zealand contributes well to Suncorp's group profit. Overall lapse rates and claims performance differ between the countries, in part, for structural reasons. We don't have a lot of TPD in superannuation, which appears to have caused some particular problems in Australia. 

The AFR went on to list the companies sold: NAB sold to Nippon Life, Macquarie to Zurich. Then to list those for sale - they name ANZ, the life businesses of Suncorp, and quote AMP as saying it is "open-minded" - although I always felt that's the proper attitude of any business, pretty much all the time. But because these businesses are often quite closely linked behind the scenes (systems, staff, brands, reinsurance, and more). Therefore, if the Australian business is sold, it is common that the New Zealand one goes with it. Not all businesses will be sold, of course. In addition, when a business is under review sometimes a bias towards a sale can uncover an opportunity to buy. But some transactions seem likely in the coming year. If the number was two, or three, it would represent an incredible period of change. 

AFR then contemplates the question - how did it come to this? You can check out their full article for details, but two issues they list are worth contrasting with the situation in New Zealand.

The first is the ASIC report that "found 37 per cent of advice on life insurance was in breach of the law and almost half failed when high upfront commissions were charged". I read that report and it has some problems, small sample sizes, and arguable definitions of what constitutes 'failing' advice. But here in New Zealand we have an advice law which barely even makes the comparison possible. Since a written record of advice is not explicitly required under our current law it may not be possible to conduct the same kind of investigation here. But the FMA has gamely tried, and by analysing five years of data they have found a strong statistical link between incentive travel offered by insurers and higher new business and lapse rates. The insurer's might say, 'well that's what we were hoping for when we offered the incentive' but that brings us back to the quality of advice.

The second is the issue of poor systems - some so poor, AFR says, that they cannot provide good information, or hamper the ability of the insurer to report, or provide effective claims service. That sounds familiar too - and some of the systems will be common across the two markets. Replacing those systems requires new capital. So even after a transaction, that will not be the end to the change in the market. It will be the beginning.