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.
Changes to direct debit processing may affect people’s payment of insurance policies
Back in May, banks changed to 7-day payment processing to align with the Responsible Lending Code, under the Credit Contracts and Consumer Finance Act (CCCFA).
Prior to this change, if a customer had insufficient funds to complete a direct debit payment, the bank may have put the customer into overdraft to complete the transaction, based on an assessment of funds expected to arrive in the customers account at a later time or based on funds available elsewhere. This will no longer happen under the Responsible Lending Code. Instead, the bank will attempt to make the payment multiple times during the day, and if none of the direct debit payment attempts are successful, the payment will be dishonoured.
Where this gets tricky, is customers may not realise they have insufficient funds. An example would be when a customer has filled up at a pay-at-pump petrol station and a merchant hold has been applied to their debit card. Due to these merchant holds being in place for up to 48 hours, this can reduce the balance available for payments, despite the balance on the customers account showing as being sufficient.
In cases like this, customers could get caught out with direct debit payments not being processed, leading to premium dishonours and policies lapsing.
Financial Advice NZ suggests that advisers check with customers that their:
wage payment date lines up with their direct debit date and/or that the customer’s insurance premium frequency lines up with their wage payment frequency and amend if necessary by emailing instructions to the relevant provider.
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Fidelity Life appoints Campbell Mitchell as new CEO
Fidelity Life has announced that Campbell Mitchell will take on the role of CEO in October this year. Mitchell is currently Chief Customer Officer at Suncorp New Zealand.
Fidelity Life Chair Brian Blake says
“The Board is delighted with Campbell’s appointment. We’re impressed with his strong track record of enabling high performing teams and leading transformation projects. He has held Executive responsibilities for a broad range of functions at Suncorp, including customer, sales, claims, operations, marketing and corporate affairs, as well as being Acting CEO of Suncorp New Zealand from time to time.
However the fit with our business, our culture and our team is equally important, and that’s where Campbell clearly stood out.”
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UK cracks down on ‘finfluencers’
We wrote about financial influencers (‘finfluencers’) in the news recently, and now the UK’s Financial Conduct Authority (FCA) has announced it is taking a tough line on finfluencers and the promotion of financial products and services online.
They point to how consumers are using social media as a go-to source of information which is being reflected in advertising trends. The FCA is currently consulting on financial promotions on social media and they working with the Advertising Standards Authority to educate consumers and influencers about the risks involved in promoting financial products. Of note, they have worked with Big Tech to update advertising policies to only allow financial promotions approved by FCA-authorised firms. It will be interesting to see if the Financial Markets Authority decides to implement any similar initiatives.
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Legal and regulatory update for the life and health insurance sector
17 Jul 2023 - The Australian Prudential Regulation Authority (APRA) has finalised a new prudential standard aimed at ensuring banks, insurers and superannuation trustees can better manage operational risks and respond to business disruptions. https://www.apra.gov.au/news-and-publications/apra-finalises-new-prudential-standard-on-operational-risk
18 Jul 2023 - The FMA has released its scenario analysis information sheet to help climate reporting entities (CREs) meet their obligations under the Climate-Related Disclosures (CRD) regime. It sets out how the FMA will apply the CRD framework relating to scenario analysis; what the FMA will look for when determining compliance with those standards; and other considerations that may help CREs ensure they meet the disclosure requirements. https://www.fma.govt.nz/news/all-releases/media-releases/scenario-analysis-information-sheet-for-climate-related-disclosures-regime/
18 Jul 2023 -The Australian Securities and Investments Commission (ASIC) has written to the Insurance Council of Australia, the Council of Australian Life Insurers and the Financial Services Council about its review of over 100 Target Market Determinations (TMDs) for general and life insurance products.The letters outline ASIC’s findings based on a sample of general and life insurance products. ASIC considered that the products reviewed represent higher risk and/or potential for poor value to consumers. https://asic.gov.au/about-asic/news-centre/news-items/asic-review-of-insurance-target-market-determinations/
19 Jul 2023 - The Therapeutic Products Bill was read a third time and passed through under urgency https://www.beehive.govt.nz/release/new-era-therapeutic-products-regulation
Fidelity Life officially integrates former Westpac Life business
Fidelity Insurance, formerly known as Westpac Life, has been integrated into the Fidelity Life Assurance Company, meaning Fidelity Life is once again operating as a single insurer.
Fidelity Life completed the $400 million acquisition of Westpac Life in February 2022, which has been operated as a separate entity, Fidelity Insurance, since then. Now all of Fidelity Insurance’s assets, liabilities and obligations to policyholders have been integrated into Fidelity Life.
Customers of Fidelity Insurance can remain assured that their policy terms and conditions are unchanged.
Fidelity Insurance Limited will be formally wound up as a registered company later this year.
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Ben Lovelock appointed as Chief Risk Officer at AIA
Ben Lovelock has been appointed as Chief Risk Officer at AIA. Lovelock has a wealth of industry experience with roles spanning actuarial and finance practice areas. He was previously Head of Ratings, Group Treasury for AIA Group.
AIA NZ CEO Nick Stanhope said
“It’s great to have someone of Ben’s calibre and experience able to receive the baton from Doune and take on this critical role for AIA NZ”
Lovelock succeeds Doune Connett, who has retired.
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The Monetary Policy Committee agreed to leave the Official Cash Rate (OCR) at 5.5%
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Legal and regulatory update for the life and health insurance sector
12 Jul 2023 - The FMA have released a consultation document on its proposal to introduce a new standard condition for certain financial market licence holders. The new licence condition will focus on business continuity and technology systems. Consultation closes 1 September 2023. https://www.fma.govt.nz/news/all-releases/media-releases/ma-consultation-operational-and-cyber-resilience/
13 Jul 2023 - Chapter Zero New Zealand produce their first impact report https://www.chapterzero.nz/news/creating-an-impact-for-climate-governance/
13 Jul 2023 - The Financial Regulator Assessment Authority (FRAA) review report of APRA has made five recommendations aimed at strengthening risk identification in the superannuation industry, continued development of capabilities and expertise of APRA’s people, investment in data and technology, enhancing transparency to maximise the impact of APRA’s outcomes, and lifting recovery planning and resolution readiness. https://www.apra.gov.au/news-and-publications/apra-welcomes-release-of-fraa-report
Salaries on the rise as skill shortages and cost of living continue to bite
While Trade Me job listings are down 15% nationwide in the second quarter compared to the first quarter, salaries are up. Trade Me says the average salary for jobs listed on its site is now $70,069, up 6% from last year. The average salary for the banking, finance and insurance industry is $86,250, up 14% over the last five years. The average salary for healthcare workers is $69,647, up 26% over the last 5 years.
Trade Me Jobs sales director Matt Tolich said
“…employers are working hard to make sure salaries are competitive in order to attract employees in this high cost of living environment.”
The Hays Salary Guide FY23/24 has similar findings, with 88% of employers experiencing a skills shortage. Perhaps because of this, 95% of employers plan to increase salaries this year (up from 88% last year). 48% of employees intending or considering changing jobs cited an uncompetitive salary as the top reason they were looking elsewhere. Hays have determined the four key factors driving salary increases to be competition amid a continued and growing skills shortage; falling real wages; pay transparency; employees’ confidence to negotiate for better compensation.
Hays lists the top five jobs employers need to fill in the NZ insurance industry as Claims Consultants, Loss Adjusters, Broker Support, Compliance Specialist and Brokers.
16,878 people arrived in Aotearoa on work visas in June, with over 15,000 people arriving on work visas every month of this year. With immigration heading back to pre-pandemic levels, hopefully this will help ease the skills shortage.
Small business owners are doing it tough. A Xero survey of small business owners has found nearly half of small business owners and 60% of sole traders aren't paying themselves so they can keep their businesses running. Bridget Snelling, Xero's New Zealand Country Manager, says
“When small business owners experience cash flow issues one of the first things to go is their own pay, followed by an inability to pay suppliers which has a ripple effect throughout the economy.
It’s a systemic and volatile cycle, which sees business owners dipping into their own personal savings, working unattainable hours, and ultimately sacrificing their emotional and physical wellbeing to stay afloat”
Nib's Easy Health offer reduces pre-existing condition stand-down time and offers 10% discount on premiums
Nib is making their policies more attractive by reducing its stand-down period for pre-existing conditions from three years to two years and by offering a 10% discount on premiums for the life of the policy with their Easy Health offer. This offer is available until 29 September 2023 for new clients under 60 years of age.
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Southern Cross launches Wayfinder Awards
Southern Cross Health Insurance is debuting the Wayfinder Awards, which recognise and celebrate organisations that prioritise their employees’ health and wellbeing. Entries for the awards are open and will close on 20 August, with the awards ceremony being held on 21 November in Auckland.
The award categories are:
Star Wayfarer Award: Recognising individuals who have made significant contributions to improving health and wellbeing within their workplaces, regardless of their position.
True North Award: Honouring people-leaders who go above and beyond to improve the health and wellbeing of their teams through positive leadership.
New Horizon Awards: Recognising businesses that have implemented new programs or strategies to improve the wellbeing of their employees.
Wayfinder Small Business of the Year: Celebrating small businesses with up to 100 employees that prioritise the health and wellbeing of their workforce as a core business strategy.
Wayfinder Medium Business of the Year: Honouring medium-sized businesses with 101-500 employees.
Wayfinder Large Business of the Year: Recognising large businesses with 500 or more employees.
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