QPR: Updates for Implementation of new FSLAA Regime

To help you prepare for the implementation of the Financial Services Legislation Amendment Act implementation on 15 March Quality Product Research Limited has made the following changes to the Quotemonster site:

  1. Prepared an outsourced provider statement. This provides you with information to meet the license conditions for a Financial Advice Provider to use a third party (us) as part of your advice process (for example: preparing comparison quotes and research reports). Subscribers to the research and advicemonster services will see an announcement when they next log in. A link to the outsource provider statement is included in the site in the About Us section. 

  2. Updated Advicemonster – an external review has been conducted, the draft statement of advice (SOA) has been updated, and the system for preparing the SOA has been improved. If you are an Advicemonster subscriber we suggest you run a new trial needs analysis to check out the new report – it is a more comprehensive and robust document that speeds up the process of creating new life and health statements of advice. If you don’t subscribe, or you would just like a quick refresher on how to use the system, click here to request a demonstration.

  3. Updated our terms and conditions – refer this link for details. Also, a link to the terms is included in the site in the About Us section, and on every page in the site. 

Coming up: there will be further changes to the adviser profile page to reflect changes to the FSPR due to the new license regime. We will update you on those next week. If you have any questions or concerns, please contact us or call (09) 480 6071. Thank you for being a customer of Quality Product Research Limited.


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. 

 


Themes for 2021 in life and health insurance

What will be the big themes for 2021 for life and health insurance? 

  • Helping people keep their cover through disruption will continue to be a theme - although economic performance has been better than expected there remain quite a few people out there struggling with adjustment to the COVID economy. Several advisers tell me of long conversations that are essentially about conservation. They take time and they generate little revenue - this largely unsung work is of a piece with claims help and is part of the value of the commission model: the adviser isn't expecting to charge a fee for these discussions, they just want to help the client stay covered. 
  • The shift towards digital - within advice businesses, at insurers, and for consumers. Digital is an enabler of faster transactions, more efficient administration, better accuracy, and more meaningful engagement. More adviser businesses will develop better digital capability and be looking for ways to automate certain processes. That includes digital advice offerings. It also means better underwriting processes built around access to 
  • Direct - it has shown solid growth - and not merely as a proportion of the market which has shrunk, but in absolute terms. It has benefitted from a big drop in bancassurance and a big push through online social media platforms. I really want to see the quality of the offers improved in 2021, but that will probably require more work in the area above to achieve. 
  • Regtech - this is the year we begin to see regtech applied to insurer and adviser conduct programmes - analysis of all clients by a range of factors will be a vital complement to human-managed compliance processes.
  • Transition - to the new advice regime means that a lot of advisers will be spending a bit more time than usual working on systems, new processes, and disclosure requirements. That will hit productivity for a few weeks. Combined with holidays, will the nadir be the first quarter production figures with a recovery from there, or will the second quarter be the low point? I am expecting recovery and more confidence to recruit and focus on marketing to be able to get traction in at least the third quarter. 
  • Consolidation - adviser business size is definitely rising. The greater integration and co-ordination required to successfully meet new compliance requirements is reflected in the high number of authorised body structures being disclosed by FMA licensing statistics. 
  • Consumer knowledge and understanding will continue to rise as more advisers share relevant content in easily digestible digital media. Gradually the focus on what is most relevant and readily explainable will begin to percolate through consumer finance forums changing the general perception of 'good' this will further current consumer trends towards more living products and more packages of benefits. 

 

 


Fidelity Life wins top culture award, and more daily news

The Technology team at Fidelity Life was awarded the Best ICT Team Culture award at the 2020 CIO Awards. Dan Wilkinson, Chief Technology Officer, has said that the award is a reflection of the team’s strong culture. Wilkinson noted that culture was the first thing Fidelity Life invested in when beginning its transformation journey. Fidelity Life has said the award represents the five-year transformation strategy in place.

“Fidelity Life’s Technology team, led by Chief Technology Officer Dan Wilkinson, was presented with the Best ICT Team Culture award at the 2020 CIO Awards, a celebration of the best of the best from New Zealand’s technology community.

Dan says the award reflects a strong, above-the-line culture right across the business.

“Our culture is the foundation for every single thing we do at Fidelity Life. It was the first thing we invested in when we started our transformation journey and it’s what gets our people out of bed every day to do the amazing things we do.

“When your culture and strategy are aligned, you will win”, says Dan.

The award represents further progress on Fidelity Life’s bold five-year transformation strategy, which is built on the idea of reimagining life insurance for New Zealanders and aims to deliver sustainable growth.

Key transformation projects include Project Watson, a $25 million investment in a new technology platform due for completion in the second half of 2021; and moving to a brand new 6-star rated green building in Auckland’s Fanshawe Street planned for September 2021.”

In other news

From Insurance Business Mag: Is it OK to give clients gifts?

RBNZ: Reserve Bank Response To Letter From Minister Of Finance


Cool insurtech developments

I like to check out cool new insurtech developments. The first two below are not just cool, but actually operating and relevant to our market: 

The first one is Quashed.co.nz which offers consumers a way to corral all their insurance information in one place. This helps manage renewals, amounts, and sharing information with those that need it. Plus you can quickly spot cover gaps. It's the manila folder re-imagined as a 21st century file for all things insurance. 

Quashed2

The second is XY Adviser network. This is social media but only for financial advisers. A local adviser recommended it to me and I have enjoyed occasionally dipping into the questions and answers that people bring up. There is a wealth of support available here - all for free. There is a huge amount of fresh air too, because although there are many New Zealand advisers on the network, there are many more Australian advisers. There are relevant experiences to share all around. 

XY adviser

The last is not available to New Zealanders, and has little to do with life and health insurance, but I include it because it is cool, and is being developed by a friend of mine. It shows what can be achieved with some fresh thinking. Hillridge Technology offers crop insurance - but with technology crushing the whole process of applying, managing, and claiming. They have recently secured reinsurance and are at an exciting stage in their development. 

Hillridge

 


Advisers warned against cyber-attacks, and more daily news

After the NZX cyber-attacks, financial service businesses are being warned by the National Cyber Security Centre (NCSC). The high cyber security advisory that was issued addresses the current threat and details how attacks could happen. The NCSC has said that businesses should review current plans and systems in place.

“A high cyber security advisory has been issued by the National Cyber Security Centre (NCSC), warning financial services businesses about the current threat and outlining how the attacks could occur.

Affected entities have received ransom emails demanding payment in Bitcoin, along with a threat of a significant distributed denial of service (DDoS) attack against internet-exposed infrastructure if the ransom is not paid.

The NCSC said financial services firms should review their plans for responding to a DDoS attack to ensure they were up to date, and review their systems architecture to identify any potential points of failure. ”

Katrina Shanks has said that advisers need to avoid being complacent and instead need to know the strength of their current cyber security processes. She continued by saying that cyber-attacks affect consumer confidence and that there are many options for those looking to improve their cyber security.

“Financial Advice NZ chief executive Katrina Shanks said advisers would need to understand how up to date their cyber security processes were and what protections they had in place. And should avoid “being complacent”.

She said there were a lot of options available to businesses that wanted to improve their cyber security. “You do get what you pay for.”

She said there was a risk to consumer confidence when high-profile financial services firms such as the NZX, were repeatedly felled by the attacks.” Click here to read more

In other news

Level five isn't the big issue for advisers; It's something else

FMA: FMA releases new investor guide to bonds

Deloitte: Tricky to compare NZ insurance to other markets - report prepared for Partners Life


Legal and regulatory news update for the life and health insurance sector

27 Aug 2020 – FMA announced the appointment of Paul Gregory to the newly created role of Director of Investment Management.

https://www.fma.govt.nz/news-and-resources/media-releases/fma-appoints-new-director-of-investment-management/

27 Aug 2020 - RBNZ have issued advice to the financial services sector from the National Cyber Security Centre regarding recent cyber attacks that appear to be aimed at the financial services sector. The most high profile example has been the NZX experience. However, other companies may expect to be attacked.


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. 


Daily news update: Newpark at a cross road, and more stories

Bernie McCrea has said that Newpark is looking into introducing shareholders as well as private capital investors to help Newpark achieve long-term goals. Bernie has said that gaining funding from investors is a better alternative than accumulating debt.

“Chairman Bernie McCrea said it was interested in institutional shareholders who might invest in the business to help it achieve its goals. It was also open to investments from private capital investors who might have money in the bank earning little interest.

“People who have an interest in financial services but are earning zero at the moment and want to diversify … we are an option for them.

In other news:

Newpark has given members a choice of four options for their ongoing relationship with the group.

Australia: Former celebrity financial adviser charged with dishonest conduct

Here are five ways to avoid looming 'retirement time-bomb'

Advisers urged to “get their cyber-security sorted”

IFSO: IFSO Scheme names two new commissioners

BNZ to put all staff through courses


DAILY NEWS: Increased interest in digital insurance and more

Consumer behaviour is often fluid. Trends, word of mouth as well as personal experiences play a part in changing decision-making processes and purchasing habits. Similar to other purchasing behaviours, the way people are choosing to purchase insurance is changing. There is an upward trend of people relying on their own research and not seeking advice from financial advisers. Similarly, there is an increased interest in digital insurance providers.  

"Consumers of all ages are adopting a “millennial mindset,” according to Capgemini and Efma’s World Insurance Report 2020. This means that consumers are increasingly trusting their own research to source and purchase insurance products themselves. Customers of all ages are also increasingly turning to digital channels in the face of the COVID-19 pandemic, the report found.

 

“Digital adoption is no longer a function of age; for those with access to the web and social media, researching and directly procuring insurance online has become mainstream across all generations,” Capgemini said.

 

To remain relevant, insurers must shape their existing products to meet evolving customer needs and preferences, the report said."

Furthermore, it is reported that:

“The COVID-19 lockdown will further fuel this trend as consumers are forced to use digital channels for day-to-day transactions, irrespective of age or tech know-how,” Capgemini said. 

In other news:

Advisers haven't done enough to digitise their offering - expert

Air pollution dropped dramatically during lockdown

FSC webinar: Introducing the financial resilience index

FSC webinar: A global response to COVID-19

FSC: Spotlight on Insurance