Health / Medical Insurance Premium Comparison Database Update

For subscribers to the medical price comparison database we have just distributed a new version. These rates have been implemented on Quotemonster already, this is the large format comparison database upgrade.

Changes in V111

Updated nib rates (including new policy fee) effective 1st October 2024

If you have an adviser – you tend to get better claim outcomes

Regulatory reviews in Australia have found the claims acceptance rates for the life insurance industry between distribution channels. The difference is marked – claims acceptance rates for advised retail policies was 92.1% compared to 87.8% for direct policies. For a good review check out Jack Howitt’s article here. 

Jon-Paul Hale emphasises the importance of advisers at claim time, which perhaps provides an explanation for part of the gap: Hale has questioned the use of automated portals when it comes to claims time. From his experience, there are plenty of claims where, had the clients claimed through the portals without his involvement, the clients wouldn’t have had such good outcomes. He gives a range of examples and cautions that clients can forget what cover they have and how it works – all at a time when they may be feeling overwhelmed from the medical situation they are facing. 

On the other hand, the difference between group and retail policies in Australia leans back the other way – more towards how the policy was underwritten as a potential cause for the difference in outcomes. Group insurance policies have some of the highest claims acceptance rates at just over 95%. Howitt’s explanation is compelling:

“This is likely due to the fact that group life insurance policies are typically underwritten on a group basis, which means that insurers have less risk associated with each individual policy. Retail advised policies may have lower claims acceptance rates due to the fact that they are typically more complex and may involve higher risk individuals. Direct policies may have lower claims acceptance rates due to the fact that insurers have less information about policyholders.”

More news:

Adviser to pay former clients compensation after he breached their privacy and caused them stress

Stats NZ report finds Māori businesses lead in employee wellbeing and flexibility

Survey finds 90% of family doctor clinics plan to increase their fees

Trust matters - it helps that you can talk about independence

Join our research team on the 19th of September for a research deep dive meeting. Subjects for the coming session are:

Exploring the use of independent research in building trust and engagement with your customer

• how to increase the level of trust between you and your customer

• the value of independence in building trust

• our independence is your asset,

• the challenges of comparison,

Finding better insurance through understanding gaps in existing client coverage

• results of our research advisory board meeting consultation on non-Pharmac medicines coverage ratings,

• new head-to-head report designs, and

• the forthcoming IP research review.

We will also have time for your questions. The panel for the session will be Doreen Dutt, Kim Oliver, Sara Alani, and Russell Hutchinson.

Understanding how to use these tools better adds to your capability and conversion rates with customers. The effective use of research should be a net benefit to your business, it helps you comply, sure, but it is not just about compliance.

If your advice style is more technical, or if you just want to do a deep dive to bring yourself up to date with current rating issues, please email info@quotemonster.co.nz

Premium Comparison Database Upgrade v125

For institutional subscribers we have just distributed a new version of the Premium Comparison database v125.  

Changes in V125:

• Partners Life IP and MP Prices have been updated to reflect changes to add-on options
  We are now showing two sets of prices for Partners Life IP and MP: a basic option with no add-ons, and a Premium option which includes Critical Illness and Specific Injury add-ons. This now aligns with prices quoted on Quotemonster.
  Please see our Product Definitions files for details.

• Asteron IP LOE Plus premiums have been adjusted to reflect changes to Specific Injury add-on prices

• Fidelity Life policy fee has been reinstated (policy fee waiver promotion has ended)

• Chubb Life Direct premium have been removed - the LifeOne product is no longer on sale. We will add the new Life & Living range in due course.

 Note: This version does not contain any changes to underlying rates, just some adjustments to the way we are calculating some of the premiums

Research Deep Dive

Join our research team on the 19th of September for a research deep dive meeting. Subjects for the coming session are:

• the challenges of comparison,

• results of our research advisory board meeting consultation on non-Pharmac medicines coverage ratings,

• new head-to-head report designs, and

• the forthcoming IP research review.

We will also have time for your questions. The panel for the session will be Doreen Dutt, Kim Oliver, Sara Alani, and me. If your advice style is more technical, or if you just want to do a deep dive to bring yourself up to date with current rating issues, please email info@quotemonster.co.nz

An Exceptional EA

If you're in need of an exceptional Executive Assistant (EA) to elevate your business operations, I have a highly recommended candidate who brings a unique blend of creativity, efficiency, and emotional intelligence to the table. With a strong background in executive support, project management, and client relations, this professional excels at managing complex schedules, streamlining processes, and fostering a positive workplace culture. Their ability to anticipate needs and deliver solutions before challenges even arise sets them apart as a proactive and highly dependable asset to any executive team.

In addition to impressive technical skills, this candidate is deeply committed to personal and professional growth, continuously seeking new ways to enhance their capabilities. Their experience across various industries, combined with a creative problem-solving approach, makes them a perfect fit for dynamic and fast-paced environments. Whether it's improving workflows, managing high-stakes projects, or ensuring that day-to-day operations run smoothly, this EA consistently goes above and beyond to ensure success. If you're interested in learning more, please feel free to email me for further details.

End of Life Choice Act in operation – a review

https://www.nzherald.co.nz/nz/assisted-dying-should-the-six-months-to-die-requirement-be-scrapped-in-new-zealand/LULHZZIOTJAYLA5NESDHUZSSYM/

The New Zealand Herald published a good article reviewing the operation of the End of Life Choice Act 2019, which is well into its third year of operation. The article details some cases and how they have been working – or not – for the people who wanted to have an assisted death.

“The End of Life Choice Society, an advocacy group which engages frequently with the ministry, said the clause excluded a large number of patients, especially those with neurogenerative diseases like motor neurone disease (MND) or Huntington’s disease. It was more difficult to predict when people with these conditions would die because they did not decline in a linear way.

The society’s president, Ann David, said the law was working well - but for a narrow group of people, mainly cancer patients.”

There have been 775 assisted deaths in approximately two and a half years. In September 2020we forecast the number of expected assisted deaths based on a similar law passed in Canada. That analysis suggested there would be around 238 assisted deaths per annum, and our current rate is about 300. Although approximately one third higher than expected, there remain many deaths which were requested which have been declined due to the uncertainty of meeting one of the requirements: that death is likely within six months. The case studies presented in the article are worth considering. The issues with estimating death are informative because we also consider these when assessing terminal illness claims, although with a longer time period based on most policy terms.

Blog birthday!

Another year has passed us by and its the anniversary of this blog. But it is not just any anniversary - the blog is 20 years old today. This time has passed in a flash. During that time we have learned a lot and we want to share some of that with you who may be considering this particular form of engagement with your clients, colleagues, and friends.

First, writing helps me be a better analyst of the sector. Personally, I have always liked to write. I started to do this as a way of organising my thoughts, as a way of providing rigour to argument, get those reviewed by other people, and to help understand both the strengths and weaknesses of one’s own analysis. These are vital for one to see through 'common beliefs’ and ‘stories that we tell’ and come closer to understanding the truth about our subjects. A good explanation of why writing works is at this link: https://paulgraham.com/words.html I encourage you to write more.

Second, this has been a great mechanism for finding other people who care about our industry, are prepared to engage with me, and therefore, this has been possibly the single best form of marketing for us. It may be more suited to our kind of business than yours. But if you are an adviser working on more technical areas or trying to engage with clients that will be demanding in terms of details and overall quality of fulfillment, then you too, may find that a blog could be a valuable component in your marketing planning. I encourage you to engage in some ‘long-form’ marketing. It’s a great way to get found.

Thirdly, our clients have found the resource so useful that it drove further innovations: we now run a news database, which includes all the blog content here, and this fulfills a lot of other content requirements - helping us to keep an eye on events for company reports, and to spot changes that feed in to quarterly life and health reports, and adviser business remuneration reviews. I encourage you to think ‘create once, use in many platforms’ connections between one thing and another are so useful. Fran jokes ‘not another database’ and yet - spotting relationships between events and data, and other data, has been so central to our success both at Quality Product Research and in consulting that it could also be a guide. So I encourage you to build databases.

I always write this, too, on our anniversaries: if you are thinking you would like to write about the sector, and you don’t want to set up your own blog because of the commitment, you could become a guest commentator here. Please send me a draft article and I will look at it and give you a call to discuss if we can use it. I would be delighted to help you experiment with this process.

Lastly, I could not do this without other contributors. Fortunately in my team I have several people who help a lot with this process. Kelly O is the content creator for the regular news pieces these days, as I must work on other things. She also helps to proof many of my pieces. Ed Foster, our data scientist writes many great pieces - but usually for quarterly life and health reports. Along with Fran and Doreen who also provide content from time to time here. In addition I am grateful for proofers these days: Kelly P and Aneel Ravji who are very good at checking and challenging me on what we publish. Friends in the industry who help are too numerous to mention them all but Jeremy Bernstein has an eagle eye and a real passion for the sector, and so is one of our best at giving feedback. There are many others and I am deeply in your debt if you have written me an email to give a point of view or perspective - or to tell me I’m wrong - these are really valuable to have when writing.

All the claims data is shouting a message we do not want to hear

Two claims data releases by (AIA and Partners Life) shout out strongly the large causes of claims: these are driven mainly by non-communicable disorders. That’s cancer, respiratory illness, heart disease, diabetes, and mental health problems. Although many claims, especially in income protection, are initially caused by accidents - they are still a minority. Although many claims causes are much more widely reported - murder, suicide, motor vehicle accidents, terrorism - it is the non-communicable diseases that steal decades of life from our family and friends. Although it is understandable, perhaps, to believe that sudden external and violent means of death are more preventable, the truth is the reverse. In terms of personal agency, the extent to which choices you make can influence the outcome, people have more power to reduce risks by working on the causes of these big non-communicable disorders than almost any other health intervention. It’s also relatively low cost to make these changes. It is not easy, but good things rarely are.

AIA published back in 2021 the excellent “5590+” report which highlights how five ‘modifiable behavioural factors’ lead to five non-communicable diseases, that account for 90%+ of the deaths in New Zealand. It is worth a read: 5590+, the numbers that will help you lead a healthier, longer, better life (aia.co.nz)

That this is not an easy read is clear. Most people do not want to be told that diet and exercise are the answers. They would rather a pill or procedure. It is also important to acknowledge how hard it is to move against trends that are in the majority in society. In the 1970s it was possible to eat the way most people do today, but it was difficult, so most people were slimmer. The reverse is now true. That the odds are stacked against you is unarguable: modern processed food, takeaways, and restaurant meals are almost designed to work against you. It is hard to force yourself to eat well, and easy to eat badly.

That much of the media are happy to highlight the scary, and very rare, makes it hard to turn towards the daily and the commonplace with fresh eyes and face them down. Some social media scaremongers are trying to worry you about sideshows, it remains necessary to stay focused. That means improving what we do every day in terms of food, drink, movement, and attention. It is not just you it is also a challenge to me. Weighing in at 1.5 kilos more than I was on Jan 1st, I have to keep my eyes on the prize and get back to smaller portions, more greens, getting out into nature, and pushing a bit more tin at the gym.

How long you live is a critical question for financial planning

How long will I live?

This is the single most important piece of information for most financial planning questions. Almost everything hinges on two risks: that you might die ‘too soon’ or ‘too late’. Let us ignore the diversionary idea that there is a ‘right time’ to die and focus on the financial issues.

First, I’m writing about this because I just read an interesting piece about retirees needing to go flatting again as they are unable to live on what super provides. Aged Kiwis ‘only just surviving’ as they go ‘flatting’ again to make ends meet | Stuff The article calls for super to be raised when people hit 80. They even quote that “It hasn’t adjusted for the fact that people live until 100”. This sounds awful – much like how tax brackets are not indexed and due to recent high inflation ...hundreds of thousands more people have been pushed up to higher tax brackets despite not earning in real terms any more

You’ll notice the article doesn’t mention that super was only supposed to support people for a few years between retirement and death – not the decades people can expect now. In fact, this is almost exactly the reverse of unfair to retirees. In this case, longer lives means recipients of New Zealand Superannuation are already receiving much more than was originally intended, because they are living so much longer. Once again, I stress I am delighted we’re all living longer, and long may that trend continue. But what’s going on is that all the mortality risk – in this case the need for loads of extra money because retirees are living longer - is borne by the government. Or, younger taxpayers: aka, your kids and mine, of which there are not enough to support the ever-larger numbers of people who will be claiming New Zealand super.

Let me give you another example. When Germany introduced an old age pension the age of qualification was initially set at 70. This was in 1889, when life expectancy was only about 45-50 years for women, and a bit shorter for men. In fact, only about 1% to 1.5% of the population were expected to make it. This was so nakedly mean that the age of qualification was subsequently moved to 65.

Fast forward to our current situation, where we spend about $19.5bn a year on superannuation - this will jump to about $39bn over the next fifteen years. To match the originally stingy scheme offered by Germany in the 1880s we could move our retirement age up a lot – to something around age 100 would do it. But, of course, that’s ludicrous. We want to care for our older folk, especially those that cannot work. I checked current political parties’ stances on this issue and there’s almost no difference between them. Labour says they want to keep the age of qualification at 65, while coalition parties National, Act and New Zealand First want to move it to age 67. In the grand scheme of things this makes almost no difference. Perhaps it is time to talk about this age change again, as roughly half of all the people aged 65 to 69 inclusive are still in the workforce.

There are some other challenges with our cherished New Zealand Superannuation. The gender pay gap finds exaggerated expression in retirement – because of all those years getting paid more, men tend to retire with healthier superannuation savings in the first place, and yet will sicken and die younger. If they are in a relationship that means the demands of their care drain the couple’s joint savings, leaving less for the women to live on as per the article “…all the couple’s money is spent on care of a male partner, who statistically needs it first. When he dies, women are left penniless and, what we are now seeing more, homeless.” Although I feel immensely for the surviving and impoverished partner, I also feel sympathy for the man who will live a good five to seven years less on average. The more political among you may pause to consider the balance between your desire for, say, an equitable financial outcome between this hypothetical man and woman, and the alternative of considering ways to address your desire for more equitable life expectancy outcomes.

Will this result in more homelessness for women? We do have a lot more homeless people overall. This chart is colour coded blue-ish for National led governments, and red-ish for Labour led ones, so we can be clear about the consistent contribution to this policy outcome from both our major parties.

I couldn’t specifically reference homeless people broken down by age. Although my searches led me to find that men are far more likely to be homeless than women, our generally appalling inability to house people, which is a product of a seemingly shared multi-party neglect for about the last forty years suggest that the threat of homelessness for older people is real. So perhaps we can look forward to more equity in this regard in the future, with women being increasingly thrown out of rental accommodation in their advancing years due to the inadequacies of New Zealand Super.

What might a more logical superannuation policy might look like?

·       Increasing contributions to KiwiSaver would help each person build up a better personal cushion that they can employ based on their own specific circumstances

·       Those that have worked in hard manual jobs and have serious health challenges should be allowed to access their retirement savings earlier and with good advice could choose to consume their retirement fund faster – an option they are not given with state pensions, although, that too could be considered

·       Pushing up the age of eligibility for New Zealand Super would make the scheme more sustainable and could fund a more generous treatment at a more advanced age.

·       We could offer those that defer their pension a higher weekly amount when they do start to claim it.

·       We could do a better job of genuine safety-net benefits and increase the supply of housing to try and avoid a future where there are more elderly homeless people.

·       As an additional tool, when inflation kicks off, we could make KiwiSaver mandatory and automatically increase everybody’s KiwiSaver contributions - leaving people better off financially when older and seeing a more immediate pullback in spending to bring down inflation quicker

No one is really making the case for any of the suggestions above currently, or perhaps more than a dozen others that I have heard talked about by people interested in retirement policy. When financial services companies do, we are accused of feathering our own nests. We must admit that conflict of interest, but we also need to keep telling this story. Retirement policy is too important to be left to just the politicians.