Chatswood serves the life and health insurance sector in New Zealand with market intelligence, data, and bespoke consulting services. Some of these are provided in conjunction with Quality Product Research Limited - a subsidiary that brings you Quotemonster.
We believe that good decisions are more likely to occur when we have good information about the market environment in which we operate. Intuitive leaps and creative decisions are always required, of course, but the more they are based on a firm foundation of observation, the better they tend to be.
Legal and regulatory update for the life and health insurance sector
1 Jun 2023 - Following consultation on draft regulations, the Ministry of Justice have decided six of the proposed changes need to be in primary legislation. https://www.dia.govt.nz/AML-CFT-Update-on-changes-to-AML-CFT-Act-regulations
1 Jun 2023 - The FMA has filed High Court proceedings against Medical Assurance Society New Zealand Limited (MAS) and its subsidiaries for fair dealing breaches under section 22 of the Financial Markets Conduct Act 2013 (FMC Act). The FMA claims that between 2014 and 2022, MAS failed to apply the correct inflation adjustments on its customer policies, failed to apply multi-policy discounts and no claims bonuses, and underpaid life and disability claims to eligible clients. https://financialmarketsauthority.cmail20.com/t/r-l-tttjqly-btuitpxk-y/
1 Jun 2023 - The Accident Compensation (Access Reporting and Other Matters) Amendment Bill, was read a third time. This means people will now be able to access the minimum rate of compensation earlier – from the second week of injury instead of having to wait until the sixth week. https://www.beehive.govt.nz/release/faster-acc-payment-top-ups-and-fairer-system
Financial Advice NZ’s Money Month Campaign needs your financial tips
This year’s Sorted Money Month is on the topic ‘Maximising Your Money’. Financial Advice NZ’s social media campaign will run across August 2023 and will comprise videos and fact sheets of top tips for different life stages.
Financial Advice NZ is calling for their members to make and submit videos sharing their top tips for maximising money for the following life stages:
• Top tips for when you’re young (20s-30s) – week 1
• Top tips for in your mid-life (40s) – week 2
• Top tips for pre-retirement (50-64) – week 3
• Top tips for retirement (65+) – week 4
Financial Advice NZ will credit all contributors in videos, fact sheets and social media posts, and will be promoting the importance of seeking professional financial advice. Find information on how to film and submit a video here.
More daily news:
Peter Fa’afiu appointed as an Independent Member Director on the Financial Advice NZ Board
The Retirement Commission launch De-jargoning Money initiative
Don Stewart, founder of the Stewart Group, retires
Sir Ashley Bloomfield promotes Pause Breathe Smile programme
Sir Ashley Bloomfield has partnered with Southern Cross to promote the Pause Breathe Smile programme.
“I’m very excited about supporting Pause Breathe Smile as a way to help our children be more resilient, positive, and ready to face challenging situations in their own lives.”
Aimed at supporting mental health and wellbeing among children, Pause Breathe Smile is funded by Southern Cross and is available to all kura, primary and intermediate schools in New Zealand. Over 114,000 children across more than 400 schools had completed the programme since Southern Cross partnered with the Pause Breathe Smile Charitable Trust in 2020.
Survey results show the efficacy and importance of the programme. Chris White, CEO of Southern Cross Healthcare, said
“More than 1,000 responses from educators trained in Pause Breathe Smile showed that positive behaviour in the classroom increased by 12.4 per cent and negative behaviour in the classroom reduced by 10.1 per cent. We were also excited to see that 12 months on from introducing PBS, general student wellbeing was up 16.6 per cent and that the number of students flourishing increased by 8.1 per cent.”
More daily news:
Chubb Life raised its underlying rates on a wide range of products, extends two months free campaign
Chubb are holding the inaugural Chubb Connect event on Friday 23 June
Katrina Shanks writes of how businesses are underwhelmed by the Budget
AIA put 15 staff through HIKITIA MAI, their new Women in Leadership programme
mySolutions is holding a cyber security webinar 9 June
ASB wins 2023 INFINZ Corporate ESG Award
ANZ are holding a Māori in Business webinar 15 June
The average age of people of people enrolling for financial services certificate is 36
Law firm cautions the FMA has increased use of its Section 25 information gathering powers
Two new mental health facilities open at the Christchurch Hillmorton Hospital campus
Regular exercise may reduce a woman's chances of developing Parkinson's by as much as 25%
Legal and regulatory update for the life and health insurance sector
24 May 2023 - APRA released Australian private health insurance statistics for March 2023 https://www.apra.gov.au/news-and-publications/apra-releases-quarterly-private-health-insurance-statistics-for-march-2023
24 May 2023 - Office of the Privacy Commissioner’s (OPC) latest Insights Report shows four key insights for small businesses:
Understanding privacy does not necessarily translate into good privacy practices.
What business sector you are in can increase your privacy risk.
Businesses need systems for giving people their own information, promptly.
Whether a business is big or small, the privacy breach risk is about the same.
https://privacy.org.nz/publications/statements-media-releases/new-news-page-7/
25 May 2023 - The Privacy Commissioner has outlined expectations around organisations using generative artificial intelligence (AI)
1. Have senior leadership approval
2. Review whether a generative AI tool is necessary and proportionate
3. Conduct a Privacy Impact Assessment
4. Be transparent
5. Develop procedures about accuracy and access by individuals
6. Ensure human review prior to acting
7. Ensure that personal or confidential information is not retained or disclosed by the generative AI tool
https://privacy.org.nz/news/media-releases/privacy-commissioner-outlines-expectations-around-ai-use/
26 May 2023 - RBNZ confirmed its proposal to ease mortgage loan-to-value ratio (LVR) restrictions. From 1 June 2023 LVR restrictions will be eased, from: 10% limit for loans with LVR above 80% for owner occupiers, and 5% limit for loans with LVR above 60% for investors. To: 15% limit for loans with LVR above 80% for owner occupiers, and 5% limit for loans with LVR above 65% for investors. https://www.rbnz.govt.nz/hub/news/2023/05/lvr-restriction-easing-confirmed
29 May 2023 - On 2 June, the Reserve Bank of New Zealand will publish new statistics from the monthly New Credit Flows Survey, making more data available to all users. The New Credit Flows Survey collects data from registered banks on new lending during the month and its associated weighted average interest rates. They are also looking at expanding publications this year from financial reporting in the Bank Balance Sheet survey (BBS) and Loan to Valuation - New commitments (LVRNC). https://www.rbnz.govt.nz/en/regulation-and-supervision/oversight-of-banks/resources-for-banks/surveys/new-credit-flows
29 May 2023 - FMA hold final online session 8 June to provide an in-depth view of the questions that will be asked in the annual FAP Regulatory Returns. https://financialmarketsauthority.cmail19.com/t/r-l-ttjttlly-btuitpxk-u/
30 May 2023 - Minister of Commerce and Consumer Affairs, Hon Dr Duncan Webb, February 2023 diary released with the following potential financial services sector related meeting noted:
• 4 Apr 2023 – Meeting with Commerce Commission
• 5 Apr 2023 – Pre-record of speech for the Financial Services Complaints Ltd Conference opening
• 5 Apr 2023 – Meeting with Banking Ombudsman Scheme (Chair, Banking Ombudsman)
• 5 Apr 2023 – Meeting with Financial Services Complaints Ltd (Chair, Financial Ombudsman, CEO, Case Management Team Leader)
• 19 Apr 2023 - Meeting with The Cooperative Bank (CEO)
• 19 Apr 2023 - Videoconference with ASB (CE)
Options for a business that finds itself behind in business loan repayments
Times are tough. Credit reporting agency Centrix is already seeing numbers of consumer accounts in arrears climbing and companies defaulting on their loans increasing. Economists are predicting the Reserve Bank of New Zealand (RBNZ) will need to raise the Official Cash Rate (OCR) higher than the forecasted peak of 5.5%. A RBNZ survey of 1,000 New Zealand householders has found they expect inflation to be higher in a year than it is now. The unemployment rate is at a near-record low of 3.4%, making finding staff difficult. It’s not surprising that some businesses are struggling.
Katrina Shanks writes of options businesses can look at if they find themselves in financial difficulties.
• Talk to a risk manager at the bank about your options as soon as possible. They may include interest-only payments or reduced payments over a longer period. You’ll need a business plan to show how you plan to trade yourself out of the difficulty.
• Lower inventory levels so less money is tied up in goods.
• Increase margins – you’ll need to trade off the risk of losing customers who may shop elsewhere if prices increase.
• Reduce credit for slow paying customers
• Deal with fewer suppliers and negotiate better terms with those you keep.
• Request longer credit terms with your suppliers.
• Move to cheaper premises.
• Talk to a mentor to help with your stress.
• Seek professional help as to next steps if you can’t trade out of your financial position.
More daily news:
Russell Hutchinson identifies areas in the proposed Insurance Contracts bill that may cause problems
Katrina Shanks writes about how small business owners are faring compared to other countries
AIA has appointed Calvin Romeo to the role of head of ASB Partnership
Westpac's interest income was $2.85b, ANZ’s was $4.67b, in the six months to the end of March
Financial Advice NZ webinar 'Navigating retirement villages: What advisers need to know' 14 June
Financial Advice NZ are holding Professional Ethics workshops on 21 July and 15 September
Official Cash Rate now 5.5%
The Reserve Bank of New Zealand’s (RBNZ) Monetary Policy Committee has voted to raise the Official Cash Rate (OCR) from 5.25% to 5.5%.
The RBNZ has indicated that the OCR will need to stay at a restrictive level “for the foreseeable future” to get inflation back down to the RBNZ’s 1% - 3% annual target range.
The RBNZ has acknowledged that demand in the economy is slowing, with businesses reporting less demand for their goods and services, and homeowners feeling less wealthy due to falling house prices. However, low unemployment, the uncertain impact of high immigration on overall spending, rapid recovery in overseas visitor numbers and the repair and rebuild of parts of the North Island due to recent severe weather events all support economic growth.
The RBNZ is still forecasting 5.5% as the peak for the OCR, with cuts anticipated from the third quarter of 2024.
More daily news:
Katrina Shanks explains what regulatory returns are for and the FMA's expectations
ASB Business Sustainability Loans aimed at supporting positive social and environmental change
Massey University launch Complaint Response and Management course
AIA NZ Legal team named NZ In-House Team of the Year at the 2023 Australasian Law Awards
Minister of Health announces 8% pay boosts for GP & community nurses
Government launches new mental health tool for small business owner-operators
Proportion of households behind on their mortgage repayments in March up 26% on last year
Naomi Ballantyne to retire from Partners Life
Naomi Ballantyne has announced her intention to retire from Partners Life. Ballantyne will remain as Managing Director until her planned departure after the completion of the March 2024 financial year end. Ballantyne plans to undertake some consulting work for the global Dai-ichi Life business after her departure.
Ballantyne has been with Partners Life 12 years, after founding it in 2011. Dai-Ichi Life purchased Partners Group Holdings for $1 billion in August 2022.
More daily news:
nib unveils more details of their Life and Living policies, available from 1 June
Southern Cross offers 2 months free life insurance
Some FAPs have unnecessary duplication of information when complying with disclosure regulations
FMA executive director Paul Gregory challenges the market to substantiate its green claims
AIA NZ has been awarded the Accessibility Tick
Legal and regulatory update for the life and health insurance sector
19 May 2023 - The Federal Court has found four companies that are or were part of the AMP Group breached the law when charging life insurance premiums and advice fees from the superannuation accounts of more than 2,000 deceased customers. The Federal Court ordered two of these AMP companies to pay a combined penalty of $24 million for the breaches. https://asic.gov.au/about-asic/news-centre/find-a-media-release/2023-releases/23-129mr-court-penalises-amp-24-million-for-charging-deceased-customers/
19 May 2023 - Results of The New Zealand Consumer Survey 2022 are available https://www.consumerprotection.govt.nz/news-and-media/results-of-the-2022-new-zealand-consumer-survey-are-now-available/
22 May 2023 - FSC publishes Vulnerable Member Framework for Trustees https://blog.fsc.org.nz/guide-vulnerable-member-framework-for-trustees
23 May 2023 - The Financial Markets Authority has filed criminal charges against Yuen Pok (Paul) Loo following offences under financial markets legislation. Mr Loo forged a letter purporting to be from the FMA granting his company a FAP licence. https://financialmarketsauthority.cmail20.com/t/r-l-ttjhkuid-btuitpxk-j/
Chris Carnall talks about nib’s soon to be launched life and living expansion
Chris Carnall spoke to Insurance Business about nib’s life and living insurance expansion. Back in March, nib New Zealand completed the separation of Kiwi Insurance from the customer systems of Kiwibank. From 1 June advisers will be able to start selling nib’s life and living services.
Carnall referred to the product launch as an interim solution, with a full-featured version for advisers looking to be at least another year away.
“We’re going to market with it because we are going to be having a direct-to-consumer advertising for the solution set that starts about the same time, and we need to make sure that advisers have access to the same sort of products that anyone can buy if they did go through direct channels with us, given that advisers are the cornerstone of our business.”
Roadshows across the country will explain what the products are, who they’ll likely appeal to and how advisers can get involved. Advisers can register to attend the roadshow of their choice here.
22 May - New Plymouth, Palmerston North
23 May 2023 - Napier
24 May 2023 – Wellington, Nelson
25 May 2023 – Auckland Central, Hamilton
26 May 2023 - Tauranga
29 May 2023 – Queenstown, Invercargill
30 May 2023 – Dunedin, Timaru
31 May 2023 - Christchurch
1 June 2023 - Whangarei
2 June 2023 - Auckland North Shore
More daily news:
nib partners with EMA to deliver Employee Experience Workshops
Fidelity Life’s Billy Miller is speaking at Tech Week about tech careers in the insurance industry
ANZ and Westpac economists increase forecasts for OCR peak
Pinnacle Life offer life insurance through the Quashed portal
Julia Vahry talks about how people are still happy to spend on life and health insurance
NZ sees spike in hospital admissions for respiratory conditions, especially for under-5s
Questions answered: does everyone already have a life insurance policy?
Question from a reader:
The FSC have released their quarterly life insurance snapshot FSC SPOTLIGHT Life Insurance MAR 2023.pdf (hubspotusercontent-na1.net). What I found particularly interesting was there are 4.1 million life insurance covers and New Zealand has about 5.18 million residents. Stats NZ has 986600 people under 15 in 2021 national-population-estimates-at-30-june-2021.xlsx (live.com), and I would assume most under 15 year olds wouldn’t have (or need) life insurance. So, are we basically at market saturation now? Or are there a large number of people with multiple life insurance policies?
Answer:
At Chatswood we do not think that everyone has a life policy and you are right to suspect that multiple policies is a likely explanation. For example, at one point I had five policies with Sovereign, that was a consequence of how increases and additions were done. At the same time I had some group life insurance in the staff scheme, so that made it six. I may have had some credit card insurance too. We work on an average of between two and three policies per person, which leaves the uninsured at about 50% of the working age population. The FSC has also recently done a survey of consumers and their answers indicated that the coverage rate is about 38%. However, consumer surveys about low engagement products such as life insurance are particularly susceptible to response biases. I explore some of these issues in my recent article at goodreturns 'why is is so hard to know how many people have life insurance?' If you would like a more detailed approach to this with the associated modelling and sources please contact us for a copy of our special report on market size and flow.