Updated Health / Medical insurance price comparison

While this has already been update on Quotemonster our large scale price comparison database for institutions has been updated. V116 has the latest Southern Cross rates effective 1st March 2025. This has been distributed to subscribers.

Now more than 250 legacy and group contracts rated

The research team are on a roll and have added another fifty legacy insurance and group products to our standalone head-to-head comparison feature. This brings the total of legacy ratings to more than 250 products. No other research tool has so many legacy and group ratings that are bang up to date. Unlike merely using ‘old product’ ratings, these legacy ratings stay fresh because as we update our view on the weighting on items in the product range these legacy ratings are automatically re-weighted so they remain comparable to current on-sale product research. If you haven’t checked out how to use the legacy product comparisons and group insurance comparisons please give one of the team a call.

Latest Health / Medical Insurance Pricing Database upgrade

The latest rates for nib have been live on Quotemonster since their implementation on 1 February, however, we have now updated the institutional price comparison database. version 115, distributed last Thursday. Please contact us if you would like a demonstration of this product.

Insurtech and Insurance Law Reform - Impacts and Innovation Opportunities

Below is a high-level overview of the impacts and innovation opportunities arising from the Insurance Contracts Act changes. We prepared this overview as part of our participation in an excellent Insurtech event, held last night at the Partners Life offices in Takapuna. The Insurtech community got to talk about how changes to insurance law will affect the insurance industry.

My fellow panellists were Charlotte Cockrell, Head of Legal, Remediation & Company Secretary, Fidelity Life; Jon Davies, CEO, InsuredHQ; Levonne Bell, GM of Underwriting and New Business, Partners Life. There was an excellent introductory presentation on the changes to the legal framework by Mark Banicevich, Industry Engagement Manager, Partners Life, too.

Grateful thanks to Paul O’Leary and Rob Ellis and the Insurtech team, as well as our hosts Partners Life for enabling the event.

Insurance Law Reform – Impacts and Opportunities for Innovation

Prepared by: Russell Hutchinson, Director, Quality Product Research Limited - 4 February 2024 – and staff.

Introduction

The Contracts of Insurance Act 2024 represents a significant overhaul of New Zealand's insurance contract law. The impacts will be felt in systems processes and documents. At Quality Product Research Limited we review those things all the time for hundreds of on-sale and legacy policies with our team of five researchers. Below is a summary of the key changes introduced by the Act, with our comments. In commentary we aim to highlight areas where insurers may have more work to do, and what that may entail. There is an impact, and usually, an opportunity for innovation in most of these areas. InsurTechNZ members can probably think of more, but this, we feel is a good place to start. 

• Redefined Disclosure Duties:

• Consumer Insurance Contracts: Policyholders are now required to "take reasonable care not to make a misrepresentation" when entering into or varying a contract. This shifts the onus onto insurers to ask clear and specific questions. What constitutes ‘clear and specific’ is not yet defined. Experience from the UK following similar law and regulation suggest that long compound questions, catch-all questions, and questions unlimited by time are unlikely to meet requirements. ensuring that consumers understand their disclosure obligations.

• Non-Consumer Insurance Contracts: Policyholders must make a "fair presentation of the risk," disclosing all material circumstances they know or ought to know. This ensures that insurers receive sufficient information to assess the risk accurately.

• Impacts - all insurers will need to review application questions, including initial applications, supplementary questions, and probably some aspects of offers of terms. The changes are probably more significant for those insurers who offered short-form underwriting. These questionnaires often had complex compound questions and a catch-all question which may not meet the requirements of the new law. This means the impacts are probably greater for direct and bank insurance offers than for fully-underwritten offers normally distributed through advisers.

• Innovation: there is substantial opportunity for innovation in this step in the advice process and insurer’s underwriting processes. The aim should be to not just match legal and regulatory requirements with updated systems questions but push further into new methods for underwriting that bring process reengineering benefits not just mere compliance.

• Proportionate Remedies for Non-Disclosure:

• The Act introduces proportionate remedies based on the nature of the policyholder's non-disclosure or misrepresentation:

• Deliberate or Reckless Misrepresentation: Insurers can avoid the contract but must return the premium.

• Unintentional Misrepresentation: Remedies are based on what the insurer would have done if aware of the true facts, such as adjusting the terms or premium.

• Impacts: it depends on the current claims processes of the insurer. Most of the insurers I deal with regularly, and that goes for advisers too, will not have to make radical changes to claims processes. Again, this is more likely to affect insurers who underwrite less upfront.

• Implied Term for Timely Claim Payments:

• Insurers are now obligated to pay any sums due in respect of a claim within a "reasonable time." What constitutes a reasonable time will depend on factors like the complexity of the claim and any external factors beyond the insurer's control.

• Impact: most insurers do not aim to stretch out claim payment processes. Some claims, however, do take time to process. That can be because of a lack of required information. Clearly, expediting that is now more of a priority.

• Innovation: death claims are ripe for automation. We have good public registers of deaths and these could be searched and analysed to enable claim payments with little human intervention. Some trauma and IP claims could be automated as well if better access to health and ACC databases were available. Currently access to these is limited and does not enable automation. However, if government is serious about enabling innovation, adding doctors, pharmacies, specialists, the Ministry of Health, and ACC to its planned targets for a consumer data right would be a great step!

• Plain Language Requirements:

• Insurance contracts must be written and presented in a clear, concise, and effective manner. This aims to enhance consumer understanding and allows for better comparison between insurance products.

• Impact: special hat tip to Mark Banicevich who pointed out that these terms are in the associated law the Contracts of Insurance (Repeals and Amendments) Act 2024. There will be endless debate about what represents ‘clear, concise, and effective.’ Not all of those terms work in concert – clarity sometimes requires more words than would be desirably concise. We feel that a few documents that currently have some degree of recognition for their ‘readability’ are in fact poor. On average, documents in the sector are difficult for consumers to navigate. They are typically multi-part documents, which makes finding all the relevant terms hard. Some documents are gigantic because they contain wording for every possible benefit irrespective of what the insured purchased. Almost all require the learning of specific terms.

• Innovation: we think it likely that the requirement to be concise means giant omnibus documents are a thing of the past. One test for readability measures whether something is comprehensible when text is removed. Obviously huge sections of text can be removed from omnibus documents. Another clear opportunity, already used by one insurer is personalisation – something modern systems can easily handle – examples being, instead of ‘insured’ use the person’s name, instead of sum insured insert the dollar amount of the sum insured, and so on. These days the document can continue to be updated as these change.

• Direct Rights for Third Parties:

• The Act allows third parties who are owed an insured liability by a policyholder to bring a claim directly against the insurer, subject to court approval. This modernises the previous statutory charge mechanism, providing greater clarity and efficiency.

• Impact: being able to lodge a claim for some of the proceeds of claim probably helps create some clarity. However, claims processes may have to be addressed to ensure a check is made.

• Innovation: this aspect may lean against claim automation in some cases.

• Consolidation of Insurance Legislation:

• The Act repeals and amends multiple existing statutes, including the Insurance Law Reform Acts of 1977 and 1985, consolidating them into a single, more accessible piece of legislation.

• Impact: modernisation.

• Unfair Contract Terms Provisions:

• Scope and Application: - these provisions apply to all consumer insurance contracts—those taken out for personal, domestic, or household purposes. Terms in insurance contracts are assessed for fairness, particularly those not individually negotiated.

• Criteria for Unfairness: - A term is considered unfair if it causes a significant imbalance in the parties’ rights and obligations under the contract, to the detriment of the consumer. Factors considered include the transparency of the term and whether it is necessary to protect the insurer's legitimate interests, which means there are some excluded terms, which are, broadly: terms that define the main subject matter of the contract (like the insured risk) and those setting the price, provided they’re presented in plain language, are not subject to this unfairness assessment. The Court can declare a term unfair and, consequently, void. However, the rest of the contract continues to operate as long as it’s capable of doing so without the unfair term.

• Examples of Unfair Terms (from the Act’s Guidance): - terms that allow the insurer to unilaterally vary the contract without a valid reason; terms that disproportionately limit the insurer’s liability or the consumer’s rights to claim; terms that bind the consumer to terms they had no opportunity to read before the contract was made (hidden terms).

• Consumer Empowerment: - policyholders are encouraged to challenge terms they perceive as unfair, knowing there’s a legal framework supporting their concerns. This empowerment aims to foster a more competitive market where insurers are incentivized to maintain fair and transparent practices.

• Impact: At Quality Product Research we are very interested in fairness concepts and have been researching and comparing contract terms (usually in definitions) for over 20 years. Insurers will need to review wordings, especially in standard-form contracts, to ensure they meet the fairness criteria. There’s a push towards greater transparency and simplification in policy documents, with a focus on eliminating “legalese” that could obscure unfair terms. The impact of this change creates risk. While pricing is defined as a core term the question of how premium reviews is done, for example, may not be so protected. That risk needs to be examined in some more detail. It is not the only area where a particular type of fairness – procedural fairness – needs to be examined. We are working with Nick Kirwan to develop more tools to review procedural fairness, as well as developing our ratings based on some key aspects of policy wording disclosure.

• Product design: there are wider design implications:

o   Taken individually there may be impacts and necessary actions to comply and innovation opportunities. Taken collectively the new laws may push product development in some specific directions, especially when considered alongside the need to develop products which are much more efficient.

o   Terms clarity, underwriting clarity, and claims clarity, plus requirements for speedy settlement suggest claim automation. Claim automation tends to favour explicitly stated sums insured triggered by verifiable events – what is sometimes referred to as parametric insurance in contrast to a historical bias towards the principle of indemnity. Indemnification often requires more involved verification procedures, which are slow and subject to more judgment calls. There is an efficiency tradeoff in the claim between these different types of cover, but it may be worth it for the gains from automation.

We welcome discussions about the impact and opportunities of these laws and look forward to hearing from you with your thoughts. Do contact either me or any of the team by visiting www.quotemonster.co.nz

For further information, you may refer to the following resources:

• Hesketh Henry's overview: heskethhenry.co.nz

• Anderson Lloyd's summary: al.nz

• Dentons Kensington Swan's insights: dentons.co.nz

QPR Database upgrade - V16_4

Changes in V16.4

New Products Rated

New product rated under Mortgage Protection (MP/MPD) - SBS Insurance - Home Loan Repayment effective 1 February 2025

Reviews & Remediations (personal/business):

Trauma - Minor sub-item review for Inflation Adjusted Benefit (personal) and Life Cover Buyback (personal & business)

TPD - Minor sub-item review for Counselling & Support (personal & business)

IP/MP - Sub-item review for Reduction in Wait Period (personal)

Prohibited Incentives - by Simon Papa of Cygnus Law

Simon Papa at Cygnus Law writes about prohibited incentives on the Cygnus Law blog - well worth a read and to follow the website.

Kiwimonster milestone 150 users!

Very quietly our free KiwiSaver comparison tool is being picked up by advisers - after only a few weeks we are at 150 users and rising. If you’re interested to find out more, visit www.kiwimonster.co.nz if you have a quotemonster login, that will work. If you don’t have a quotemonster login, follow the prompt to create one.

How much will you spend in retirement? What do you want to spend?

On Tuesday the Massey Financial Education Centre launched its latest retirement expenditure guidelines. I thoroughly recommend that you have a look. Presented expertly by Associate Professor Claire Matthews, who also heads the school, and Dr Pushpa Wood ONZM, the revised expenditure guidelines offer a solid, real-world, basis for thinking about how much money is required in retirement. Jane Wrightson, Retirement Commissioner, added context to the presenting team by refreshing us all on where we are at with New Zealand superannuation policy. Nick Hakes, Chief Executive Officer of Financial Advice New Zealand and host for the event, was a great advocate for professionalism in financial advice.

In attendance was a small crowd of financial advice, investment, and policy nerds. The group even included two past Ministers of Commerce and Consumer Affairs (Heather Roy, now Independent Chair of Financial Advice New Zealand, and Simon Power, now CEO of Fisher Funds). We met in a pleasant shared office space in downtown Auckland.

Three things really stood out from the presentation:

1.      Associate Professor Matthews highlighting that achieving the lump sum required to move from a ‘no frills’ budget in retirement to a ‘choices’ budget was less than many think, and therefore achievable. This practical optimism is often lost in the overly dramatic world of political debate, and is the natural ally of good quality financial planning.
2.      Dr Wood’s caution that you can live on New Zealand Superannuation provided that: you own a home, you have no debt, and you’re happy with a simple life that includes almost no travel. Pushpa then added very supportive comments about the value of professionalism, boosting her host’s mission.
3.      Jane Wrightson warned us against tinkering needlessly with New Zealand superannuation and encouraged our participation in the upcoming review of retirement income policies.

Pulling it all together, it felt like these are the lessons:

1.      To boost quality of life in retirement we need comprehensive and lasting cross-party efforts to make housing more available and more affordable.

2.      In the absence of good policy individuals can do much to steer their financial affairs better and advice helps a lot. It’s a big problem, but not insurmountable for the careful and well-advised.

3.      The Massey Fin Ed Centre academics offer consistently practical and useful contributions that help guide financial advisers and their customers towards saving for a comfortable retirement.

A reminder: Kiwimonster is live – the new, free KiwiSaver comparison tool built specifically for financial advisers. Check it out at www.kiwimonster.co.nz

Research deep dive session - Thursday 24 January at 11am

This session is not for everyone! We have our research team live most months. In this session we cover: FAQs, legacy product research, rural IP rating, and roadmap. It is usually a very small group, so if you have any other questions you want to ask the research team, this is a great opportunity. If you would like to join us, please drop us a line to kim.oliver@qpresearch.co.nz

How health innovations have increased life expectancy - and could continue to do so

I am a big fan of health innovations. I owe my life, and the lives of my wife and three children, to excellent modern health care systems. I am going to link to an excellent post about new treatments that are emerging at the end of this piece. This is a good news post to focus on what is going well, and some optimism for improvements.

Before I do that, I want to highlight some of the innovations of the last 100 years that have had the most dramatic effect on life expectancy. The early part of the 20th century - from 1900 to roughly the end of the second world war, saw a series of catastrophes. The first world war, the Spanish ‘flu pandemic, the depression, the Holodomor, and then the second world war, including The Holocaust. Life expectancy took a beating - google charts of life expectancy for Western Europe - you will see the dips especially in France. In some places you see long periods where there is an absence of data, which perhaps tells an even more horrific story. But over the last 100 years there have been some incredible innovations which has enabled a dramatic improvement in the life expectancy across developed nations - and substantial improvements in virtually all nations, some developing nations, and even in many that remain desperately poor.

Historical Context: Top Interventions of the Last 100 Years

Sanitation and Clean Water (Early to Mid-20th Century) - Municipal water treatment and widespread adoption of sanitation systems dramatically reduced deaths from waterborne illnesses like cholera and typhoid.

Antibiotics and Infection Control (1940s onward) - The discovery of penicillin and subsequent antibiotics revolutionized the treatment of bacterial infections, which were major causes of mortality in the early 20th century. Advances in surgical antisepsis and sterile techniques further reduced infection-related deaths.

Vaccines (20th Century onwards ) - Immunization programs virtually eradicated diseases like smallpox and drastically reduced others, including polio, measles, and tetanus. Widespread childhood vaccination campaigns have saved millions of lives, particularly in developing nations. It is a shame that vaccination rates in this country have been falling for some time – bringing a resurgence in diseases such as whooping cough.

Improvements in Cardiovascular Health (Mid-20th Century onwards) -Advances in understanding heart disease and hypertension led to effective treatments, such as statins, beta-blockers, and minimally invasive surgeries like angioplasty. Lifestyle interventions and public health campaigns reduced smoking, significantly decreasing cardiovascular deaths. If only we could push on and work on our obesity epidemic, we could continue to make rapid progress in this area. Some of the new weight loss medicines (see below) offer some help in the battle of the bulge – which has a huge effect on cardiovascular health, and cancer rates.

Cancer Screening and Treatment (Late 20th Century onward)
The development of chemotherapy, radiation, and surgical techniques, combined with early detection through screening, significantly improved cancer survival rates. Now we have a whole new suite of cancer medicines which look set to dramatically improve survival rates once again. But more on those later.

Advances in Maternal and Neonatal Care (20th century)
The introduction of prenatal care, safe delivery practices, and neonatal medicine has dramatically improved survival rates for mothers and infants, contributing to longer average lifespans globally. A nod should be given to safety improvements in care of children here too, which has helped not only in the first year of life, but also in the first five years.

It is hard to say exactly how much – as combinations of factors (positive and negative) have created the great outcomes we have today. In aggregate, the shift has been incredible - expectations for life expectancy at birth in the UK were about 48 for males and about 52 for females in 1900. Today they are about 82 years, about a 78% improvement. In New Zealand, the shift has been similar. I haven’t event talked about quality of life yet. Estimates vary, but the big ones have been estimated, in the UK, to have had the following contribution ranges in impact (estimates are as a percentage of the total gain in mortality).

·       Sanitation and Hygiene: 20–25%

·       Cardiovascular Disease Treatments: 15–20%

·       Antibiotics: 10–15%

·       Vaccination Programs: 10–12%

·       Maternal and Neonatal Care: 8–10%

Can the rate of gains continue?

Absolutely, yes. We did a piece of work in 2023 estimating how many deaths, annually, could be saved by bringing our health system performance up to either a) the OECD average or b) the OECD leader. The gains are substantial, and are not just about later life treatments – but saving hundreds of deaths, for example, of women in their 30s, 40s, and 50s, from breast cancer.

Plus, there are so many great new innovations. For that, I want to link to this external article, which details some incredible new discoveries, which are worth reading about:

(1) Five medical breakthroughs in 2024 - by Saloni Dattani

If you would like to read the biography for Saloni Dattani, you can find a brief one here: Saloni Dattani - Our World in Data

Overall, for most people, life has become longer, better, and wealthier. At the same time, it remains true that there is much more to be done. Even just improving access