Fidelity Life purchases Westpac Life, and more daily news

Fidelity Life has announced that they have signed a conditional agreement to purchase Westpac Life and distribute Fidelity Life products exclusively to Westpac customers for the next 15 years. NZ Super Fund: Ngāi Tahu Holdings has joined as a shareholder to help with the $400 million acquisition of Westpac Life. Fidelity Life has highlighted that they are awaiting regulatory and shareholder approvals but expect the deal to be completed by the end of the year. As part of the purchase, the Westpac Life team and 150,000 policyholders will join Fidelity Life. This will increase Fidelity Life’s in force market share from 12% to approximately 17%.

“Today we’re announcing some big news: we’ve signed a conditional agreement to buy Westpac Life and enter into a 15 year strategic alliance with Westpac to distribute our products exclusively to their retail customers.

To help fund the $400 million acquisition we’re absolutely delighted to be welcoming another large shareholder to join our cornerstone investor the NZ Super Fund: Ngāi Tahu Holdings – the investment arm of Te Rūnanga o Ngāi Tahu, one of New Zealand’s largest iwi. Ngāi Tahu Holdings are a fantastic addition to our shareholder base and further strengthen our NZ-owned credentials.

The agreement is still subject to regulator and shareholder approvals, and we expect it to be completed by the end of 2021.

A true partnership.

This new alliance with Westpac, who share our aspiration to reimagine life insurance, aligns with our plans to diversify our channel mix to help us reach even more New Zealanders.

Once the deal’s completed we’ll be welcoming the Westpac Life team and 150,000 policyholders to Fidelity Life and will boost our in force market share from 12% to nearly 17%.”

In other news

nib: nib Health Insurance Protect, Connect & Empower Seminar Series will be held in  Timaru and Dunedin

FSC: Outlook 2021/22 with Geoff Bascand


Quality Product Research: Proposed rating for Coma (Trauma)

Introduction

Following on with our recent theme of revising ratings, we have reviewed Coma, re-assessing the item based on modern definitions.  A rarely claimed on benefit, yet significant coverage in the media when the insurer decides not to pay out.  

Below are the proposed items for Coma.

Coma

Notes

Momentum life is the only provider that requires the insured to be in a coma for 96-hours, while Westpac uniquely requires a permanent neurological deficit. Three insurers, Fidelity, Pinnacle and Westpac specifically exclude medically induced comas and a similar definition is observed in the use of life support systems and response to internal and external needs.

Few insurers continue to use the Glasgow Coma Scale in their definitions – here is a quick overview of what the scale demonstrates https://medictests.com/units/glasgow-coma-score

Your feedback

We value getting your feedback on how these wordings are being applied to claims you may be aware of. Please email us with details of any recent claims to help us update our understanding.

Doreen Dutt, Research Analyst, Quality Product Research Limited, researcher@qpresearch.co.nz


QPR v14.2 is now live!

The QPR team have been working hard to implement changes to our website and Research in order to keep up with the changes in our fast-paced industry. 

Recent updates to Quotemonster: 

  • Quoting to reflect Life buyback is in-built for Asteron Life (TPD only) 
  • Enabling Class 5 TPD Accelerated Any Occupation for Asteron Life (occupation needs to be verified with the insurer)
  • Previously the QPR package score was based on the main client, we have now separated this so that each client will show their own package score according to the selected benefits. The star rating is an average of all the clients in the quote.   

Package

  • New drop-down menus option in “Settings”
  • To update your Product or Occupation Setting, click “Quote Settings”
  • To update your Adviser Profile or Security Setting, click “User Settings"
  • To update your Needs or SOA Setting, click “Needs Analysis Settings” (only available to Advicemonster subscribers)

Menu

  • For Advicemonster users, we have made a couple of changes to the SOA report. We have improved the formatting in the summary recommendations table to make it easier to edit and stopped TPD from appearing in the product options table when TPD is not selected. 
  • New “Service Status” feature located at the bottom of your Quotemonster screen. This will provide updates on any upcoming maintenance or current technical issues with our website

ServiceRecent updates to QPR Research:

  • AIA Cancer Care rated (select this in your Product Settings Screen)

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  • Cigna – Assurance Extra policy document 12/04/2021 loaded (no rating changes applied)
  • Westpac – Term cover policy document 15/03/2021 loaded
    • Life - no rating changes applied
    • Trauma  - rating changes applied

Rating reviews:

  • Life
    • Inflation Adjustment – re-rate for all companies (rating added for MAS)
    • Special Events Increase – re-rate for all companies
  • Trauma
    • Exclusions re-rate for Co-Operative Bank
    • Inbuilt Childs Trauma – re-rate for all companies
    • Diabetes mellitus (adult) renamed to Severe Diabetes – re-rate for all companies
    • Benign brain and spine tumour – re-rate for all companies
    • HIV- Medically Acquires – re-rate for AIA
    • Rheumatoid Arthritis – re-rate for Partners Life
    • Inflation Adjustment – re-rate for all companies
    • Cancer Critical – minor re-rate for Kaposi Sarcoma only
  • Medical
    • Overseas treatment re-rate for nib
    • Diagnostic Tests re-rate for all companies 
    • Minor Surgery amount score correction for nib 
  • Income Protection & Mortgage Protection
    • Rehab and Modifications re-rate for AIA
  • TPD
    • Inflation Adjustment – re-rate for all companies

Quality Product Research: (Inbuilt) Child Trauma – Part Two 

A reader has queried whether QPR takes the sum insured into account in our Research Ratings.  And the answer is yes, we do consider the amount paid by each insurer. In fact amount paid are a vital part of a value-based assessment approach - and something we capture much better than simple feature lists of benefits do. 

In trauma insurance, some companies pay the full benefit for an item, others only make a payment of 10% or 20% of the sum insured because the condition was not severe enough to warrant a full payment. Our score is varied according to how much would actually be paid. In the scenario for Child Trauma, we have a claims amount of $100,000 and calculate how much would be paid out by each insurer.  

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Furthermore, based on adviser feedback we have corrected our ratings to reflect the fact that Asteron does include the option to convert their child cover to adult trauma at age 21. Interestingly, if the parent is on Trauma Recovery (TR) and considering converting their child cover to TR with Early Trauma they are required to complete an application. 

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Your feedback

We value getting your feedback on how these wordings are being applied to claims you may be aware of. Please email us with details of any recent claims to help us update our understanding. 

Doreen Dutt, Research Analyst, Quality Product Research Limited, researcher@qpresearch.co.nz


Westpac Withdraws Gold Term and Gold Disability Income Cover

As of 15 March 2021, Westpac no longer offers Gold Term Cover (death, critical trauma, TPD) and Gold Disability Income Cover (Indemnity Income Protection). Existing policy holders, however, can continue to make amendments (i.e. increase and decrease cover amounts). Westpac Life continues to offer term life, TPD, critical illness and Agreed Value income protection in other products. For further information please click here


Westpac Australia set to sell life insurance business, and more daily news

It is being reported that Westpac Australia is working alongside JPMorgan Chase & Co. to begin a formal sale process for the life insurance business. It is being reported that the sale process could begin this month, with AIA Group, Dai-ichi Life Holdings, and Meiji Yasuda Life Insurance Co. being possible buyers.  There is a possibility that the sale may not go forward as sources have noted that Westpac is still weighing options, although Westpac has previously stated that it would focus on banking business by divesting non-core assets.

“Westpac is working with JPMorgan Chase & Co. to start a formal sale process for its life insurance business, according to a Bloomberg report. The sale process could start as soon as this month. AIA Group, Dai-ichi Life Holdings, and Meiji Yasuda Life Insurance Co. are among the firms that have reportedly been sounded out as possible buyers.

Westpac is still debating the sale, and could still decide to keep the business, sources told Bloomberg. If it decides to sell, the bank may seek a premium to the life insurance unit’s net asset value of $1.8 billion – although the asking price will depend on buyer interest.

The life insurance business is likely to see continued pressure on earnings this year, Westpac told investors in November. The unit posted $229 million in income in the 2020 financial year before write-downs, Bloomberg reported.

Westpac said it would divest itself of non-core assets and focus on its banking business after a series of scandals resulted in the banking giant getting slapped with a record $1.3 billion fine in September. Since then, Westpac has sold its general insurance business to Allianz SE for $725 million and its Pacific unit to Kina Securities for around $420 million, Bloomberg reported.” Click here to read more

In other news

FSC: Hayley George joined the FSC in February as Marketing and Communications Manager

Strategi: Strategi offers ‘Covid assistance pack’ to advisers

Strategi: Code of Conduct – how can advisers make it work?


Recent product database update

QPR database version 139 has been issued to subscribers and uploaded onto Quotemonster. This version includes the following changes:

  • Southern Cross - new policy wording effective 09/11/2020

                  - Addition of Chemo 100 and 300

                  - Rating changes applied

Remediation to:

  • Westpac - Trauma Accelerated - Diagnosis and Partial Benefit

Westpac change decision on claim, and more daily news

Rob Stock, reporting at stuff.co.nz tells us: After Joe Lobban’s death his partner Sam Robertson was informed by Westpac Life that they wouldn’t pay out the $480,000 life insurance claim as the insurer believed that Joe had failed to disclose medical information when applying. After seeking legal help Sam was able to ensure the claim was paid out.

“A year after her partner died of a heart attack, a New Plymouth woman and her two school-age daughters have finally been told by Westpac Life it will pay out on his life insurance.

Westpac Life told Sam Robertson in May this year that it would not pay the $480,000 claim, alleging Joe Lobban had failed to disclose medical information when he applied for the policy in 2014.

It was a blow for Robertson and her daughters who were scraping by on benefits, living in a rented house.

But Robertson, aided by lawyer Tim Gunn, got Westpac Life to reverse its decision, though he said was “unfortunate that this has taken the intervention of an insurance lawyer to have Westpac honour their policy"”

Sam made the claim in May 2019 after Joe died of a heart attack but was informed of Westpac’s decision to decline the claim in May 2020. After Sam’s lawyer Tim Gunn challenged Westpac’s decision, the insurer informed Sam of its decision to pay out the life insurance in July 2020.

“Lobban died in May last year of a massive heart attack, aged just 30.

The fit and active share milker had an un-diagnosed congenital heart condition.

Robertson made the claim to Westpac Life two weeks after Lobban’s death, but it took the insurer until May this year to indicate its intention to decline the claim.

After Gunn challenged the legality of Westpac Life’s decision, it reversed its decision in a letter dated July 14.” Click here to read more

We would like to highlight that we do not know the entire story. Overwhelmingly the industry has a great record on claims, but of course, a few claims can be either paid when they should not, or denied when they should not. 

In other news:

Asteron Life: TalkBack feedback programme introduced

sigma 4/2020: World insurance: riding out the 2020 pandemic storm

Financial Advice: Adviser Peer Support registration


Free cover for customer in financial stress

In a previous quarterly report we highlighted the case of Ms Earea, after having seen the story published in Stuff. Stuff has now published a follow-up to the story, as Westpac Life has waived her premium payments:

“After Earea’s story featured on Stuff, Westpac Life wrote to her to tell her: “No further premium payments will be required from you.”

“We are concerned that you have been making difficult decisions that involve personal sacrifice,” the letter said.

Earea had a $280,000 terminal illness claim declined by Westpac Life last year, with the insurer deciding her medical condition did not meet the criteria under her policy as it was not a condition the insurer believed would result in her death within 12 months.”

“Westpac Life is standing by its decision to turn down the claim, though Earea has sought legal advice and intends to challenge that.

Earea took her case to the Banking Ombudsman, which found the insurer had a right to decline the claim.”

This is a generous decision by Westpac Life which allows Ms Earea to retain the cover which she was finding difficult to afford. The dispute about the claim may be ongoing. We only have the information in the two Stuff stories to consider, so it would be unwise to comment more on that. In general terms, however, insurers asked for claims on compassionate grounds also consider their duties to other policyholders to only pay claims that meet the product terms and conditions. 

Click here to read more