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.
Research finds those in disadvantaged neighbourhoods have to travel further to reach public green spaces
As section sizes continue to decrease and more people end up living in homes with little to no backyards, are we inadvertently causing further deprivation for those from disadvantaged backgrounds?
Newsroom conducted some research using mobile phone data investigating the ease of access to green spaces. They measured distances between homes and the nearest park and found that people living in neighbourhoods with a higher concentration of social housing had further to travel to get to a park than people from neighbourhoods with minimal social housing.
Extensive research has shown that people from disadvantaged backgrounds are at a higher risk of health problems because of their social and economic circumstances, and the lack of access to green spaces in cities is a significant factor contributing to these health disparities. Limited access to green spaces means limited opportunities for physical activity, which can have detrimental consequences, and consequently strain our social and healthcare systems and our collective wellbeing.
It doesn’t seem a great leap of logic to think that in densely populated areas, there should be more access to public parks. It makes me wonder, is unequal access to green spaces contributing to health disparities? And if so, is there a moral imperative for local and national government to act to provide more equitable access to these public spaces?
More daily news:
Tony Vidler writes about some of the most important principles in the advice process
David Greenslade believes majority of FAPs are compliant, but are taking a challenging route
RegTechNZ: Simplifying CPD processes is on 23 August in Auckland
Government announces funding of $73 million for Nelson Hospital redevelopment
Quotemonster tours the capital!
We had a great session in Wellington this week!
Thank you to the attendees, Compliance Refinery and the FMA for joining us.
Quality Product Research: Proposed Medical Claims Model
Introduction
One of our themes this year was to review medical insurance ratings. An important part of that process is to revise our medical claims model, to reflect the rising costs that are present in health insurance. We have consulted on claims incidence, most claimed features, and age of uptake of health insurance and average durations already. The feedback from this process has been used to update the medical insurance claims model.
Once again, difficult decisions must be made because a model is a necessary simplification of real life. We simply cannot rate according to all real life outcomes, this would be impossible for any rating house. So, while our model is unable to reflect all the complexities that is medical insurance, our aim is to use logic and reason to capture the value of the benefits being paid more significantly than others, by using claims data provided by reinsurers and insurers, and constructing a reasonable claims scenario which illustrates the scope of coverage for most users.
In our updated model, we assume a policy holder will take out a health insurance policy at age 39 (average age is backed by insurer data), they will hold this policy for 18 years and during this period make approximately $100,000 worth of claims (in reality this could be more or less).
We assign percentages for each feature, for example, Physiotherapy contributes 1% to the total weighting in medical, this equates to $1,000. All the insurers that offer cover of $1,000 or more will have an amount score of 1%, in contrast, if an insurer only offers $300 worth of cover, will have an amount score 0.3%, reflecting their lower sub-limit.
It will be no surprise that non-Pharmac has its own level of complexity, and our model is unable to reflect every circumstance. Our view is that there is a 10% chance in 18 years of a non-Pharmac claim (Incidence) and that it will be paid once completely (100% Frequency). The amount scores are meant to reflect typical claims values, while we understand that significant differences are present between insurers, the relative differences between what each insurer offers is captured.
A summary of our proposed changes is provided in the attached PowerPoint and to download this, please click here.
If you've attended our roadshow, you may have noticed the introduction of a new infographic called 'Health Cover Benefit Maximums' this will be available to our Researchmonster/Advicemonster subscribers, and is currently in a consultation period. This is where insurers, reinsurers, advisers and external industry members provide us with feedback to ensure we are providing the most accurate information available to our users. If you would like a copy of this document, please reach out to us via email.
A reminder that our four-factor research considers four features:
Definition x incidence x Amount x Frequency = Insurance Quality Score
For more information on our methodology please click here: why methodology matters
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, Quality Product Research Limited, researcher@qpresearch.co.nz
Fidelity Life announce two key appointments
Leigh Bennett has been promoted internally to the role of Head of Underwriting. Leigh will be managing Fidelity Life’s 34-strong Underwriting team. She will be responsible in ensuring policy applications are assessed appropriately, making quality decisions and focused on achieving good customer and commercial outcomes. Most recently the Product Owner in the company’s digital team, Leigh has nine years’ experience in the life insurance sector.
Mat Bark has been appointed to the newly created role of Head of Channel Enablement. Mat is tasked with shaping Fidelity Life’s future adviser channel experience. This includes business ownership of new digital interfaces and platform innovation, modernising the legacy and in force servicing experience for advisers, and leading Fidelity Life’s Group insurance re-platform. Mat was previously Head of Existing Business at AIA.
Bronwyn Kirwan, Chief Sales and Service Officer at Fidelity Life says
“Following the delivery of some key transformation activities, we are now heavily focused on our distribution franchise and are delighted to announce the appointment of both Leigh and Mat in these critical leadership roles to help drive and enhance our engagement with advisers.”
More daily news:
Southern Cross Healthcare is recruiting for a Head of Platforms and Customer Services and a Head of Cyber Security
ANZ launch 5 in 5 with ANZ podcast
nib's top five medical claims for June released
The government has injected a further $225 million of capital into Kiwibank
Vaccine that protects against UTI’s available in NZ but not currently funded by Pharmac
Public health systems globally are under pressure
We’re seeing more and more stories of people unable to get the treatment they need from the public health system in a timely manner resorting to fundraising through sites like Givealittle to try and raise money to go private. Whether that’s raising funds to travel overseas for treatment or more recently a family waiting more than 10 months so far for what most people would consider a fairly common childhood surgery. Tauranga Hospital has been unable to provide a timeline for Natália Ferguson’s tonsil and adenoid removal surgery, saying that workforce shortages in the ENT department have impacted on both the number of patients waiting for treatment and the time spent on the waitlist. With Natália’s quality of life deteriorating and health declining, the family are trying to raise the funds for treatment themselves. I wonder, if there was capacity elsewhere in the system, could the family have not travelled to another region to get the surgery, especially given it’s usually an outpatient procedure? The creation of Te Whatu Ora was premised in part on upon removing the post code lottery, but how much progress has been made on this in the 12 months since establishment?
New Zealand isn’t the only country whose health system is stressed. The Economist has a story investigating why healthcare services globally are creaking under pressure. The article cites an Ipsos survey that questioned respondents about the quality of local health care; in almost all of the wealthy countries surveyed, people were less likely to say the service was ‘good’ or ‘very good’ than in 2021. The article has statistics from a broad array of countries illustrating how dire health services provisions have become, from waiting times in Canada reaching an all-time high (median delay of half a year between referral and treatment) to patients in Singapore waiting 13 hours to be seen at the average polyclinic (up from 9 hours in 2021).
The flow-on effects of the decline in health care are easy to see with ‘excess deaths” (those above what would be expected in a normal year) rising in many countries, for example, Germany is running about 10% higher than normal.
OECD countries are spending more on health-care as a percentage of GDP than before, but productivity has fallen. Why? The Economist points to several things that could be impacting the quality of care – burned out health care workers; exploding demand for services partly due to the delay in diagnosis due to lockdowns; sicker patients needing additional care because they weren’t treated in a timely manner; skyrocketing cases of endemic pathogens such as respiratory syncytial virus; and, of course, the ongoing additional burden on services that Covid imposes.
More daily news:
Ticket sales for the FSC Building Consumer Confidence Conference close tomorrow
August is Sorted's Money Month, with a range of in-person and online events
Amazon releases AI offering for healthcare sector that automates note-taking during consultations
Legal and regulatory update for the life and health insurance sector
31 Jul 2023 - Standards for designated Financial Market Infrastructures (FMIs) have been issued by the Reserve Bank of New Zealand and the Financial Markets Authority, following two rounds of public consultation. FMIs are multilateral systems (such as payments systems and central counterparties) that enable electronic payments and financial market transactions and are therefore essential for the day-to-day operation of the financial system and economy. The FMI Standards come into effect from 1 March 2024. https://www.fma.govt.nz/news/all-releases/media-releases/financial-market-infrastructures-standards-issued/
31 Jul 2023 - The FMA have published the FMA Outlook 2023/24, a one-page summary with details of the FMA’s priority objectives and intended programme of work for the financial year. https://www.fma.govt.nz/library/corporate-publications/fma-outlook/
1 Aug 2023 - The FMA has released a consultation document on its proposal to introduce a new standard condition for certain financial market licence holders.
The new standard condition proposes that licensees must have and maintain a business continuity plan that is appropriate for the scale and scope of its service, to make sure that their critical technology systems are operationally resilient. https://www.fma.govt.nz/assets/Consultations/Consultation-paper-Proposed-standard-condition-on-business-continuity-and-technology-systems.pdf?utm_medium=email&utm_campaign=FMA%20Update%20July%202023&utm_content=FMA%20Update%20July%202023+CID_f5788080dc9c22eb111e58e857d39bd0&utm_source=FMA%20Campaign%20Monitor%20Emails&utm_term=Read%20the%20full%20consultation%20document%20here
1 Aug 2023 - The FMA is supporting Sorted Money Month, led by Te Ahunga Ora Retirement Commission, by raising awareness of investment scams. A key message is “Hit pause before you invest” which reminds people to take extra care when searching online for investing opportunities to avoid being scammed.
1 Aug 2023 - The FMA will no longer be publishing the MIS and KiwiSaver quarterly fund update Excel sheets on their website.
1 Aug 2023 - The Australian Prudential Regulation Authority (APRA) has finalised new requirements for authorised deposit-taking institutions (ADIs), insurers and superannuation entities to publicly disclose information on aspects of their remuneration. Under the updates to Prudential Standard CPS 511 Remuneration, APRA-regulated entities will need to annually publish information on their remuneration frameworks, design, governance and outcomes. Larger and more complex entities must disclose additional quantitative information, including on payments to top executives and how they have placed a material weight on non-financial measures such as risk management. https://www.apra.gov.au/news-and-publications/apra-finalises-requirements-for-remuneration-disclosure
Partners Life premium reductions and announcement of upcoming product changes to improve flexibility
Partners Life has made a series of changes to their products resulting in premium reductions or otherwise lower prices for customers:
increased their high sum insured discount, which results in a cheaper premium
decreased the new annual policy fee from $132 to $100 for the Partners Protection Plan
adjusted premium rates for larger sums assured across life, life income, terminal illness and accidental death cover
reduced accelerated trauma on their yearly renewable premium by 10% after allowing for cross-subsidisation between life cover and accelerated trauma
Chief and appointed actuary Kate Dron said
“Given the cost-of-living crisis that’s going on at the moment, we looked at were there any opportunities for us to do anything to actually help our customers out.
….that’s looking at the way that we do things and the way that we run our business and making sure that we’re doing it as efficiently as possible. And where we’re able to do that, we’re seeing that it’s fair for us to allow the customer to share in some of those cost savings, which is why we’ve implemented these changes.”
Partners Life have announced some upcoming changes to make their products more flexible.
Ability to opt out of specific injury option and critical illness option on their disability income
Ability to opt out of total permanent disability on trauma
Legal and regulatory update for the life and health insurance sector
27 Jul 2023 - Micheal Hewes, FMA Director – Deposit Taking, Insurance, and Advice presented at the Financial Markets Law conference on the conduct of Financial Institutions regime https://www.fma.govt.nz/library/speeches-and-presentations/michael-hewes-presents-at-the-financial-markets-law-conference/
28 Jul 2023 - Minister of Commerce and Consumer Affairs, Hon Dr Duncan Webb, June 2023 diary released with the following potential financial services sector related meeting noted:
• 15 June 2023 – Meeting with Kiwibank (CE)
• 19 June 2023 – Meeting with NZ Bankers Association; Kiwibank; Westpac; ASB; ANZ; BNZ; Cooperative Bank (CE's)
• 19 June 2023 – Meeting with TSB; Heartland Bank (CE's)
• 22 June 2023 –Meeting with NZ Bankers Association (CE, Engagement Director)
• 28 June 2023 - Meeting with FMA (Chair, CE)
• 28 June 2023 - Speech at Better Banking Report Launch
• 29 June 2023 - Meeting with Consumer Data Rights Stakeholders
https://www.beehive.govt.nz/sites/default/files/2023-07/June%202023%20Proactive%20Diary%20Hon%20Dr%20Duncan%20Webb%20.pdf
28 Jul 2023 - The FMA's climate-related disclosures experts discuss the key concepts of scenario analysis and outline FMA’s compliance expectations. https://www.fma.govt.nz/library/speeches-and-presentations/presentation-scenario-analysis/
31 Jul 2023 - The Reserve Bank of New Zealand – Te Pūtea Matua has released its first consultation material on implementing the recently enacted Deposit Takers Act 2023 (the Act), with proposals for the Proportionality Framework and for levies to fund the Depositor Compensation Scheme (DCS). Consultation closes 25 September 2023. https://www.rbnz.govt.nz/hub/news/2023/07/first-stage-of-consultation-on-deposit-takers-act-implementation-launches
31 Jul 2023 - The Commerce Commission is looking at ways to remove barriers to more innovative payment options that would allow Kiwis to make in-person payments directly between bank accounts, as a low-cost alternative to current card payment options. The Commission is seeking views on its characterisation of the issues and opportunities in this space, responses are due by 4pm on 25 September 2023 https://comcom.govt.nz/news-and-media/media-releases/2023/commission-explores-pathways-for-more-innovative-payment-options
Week two ends in: Queenstown and Invercargill
We finished up week two of our roadshow in beautiful Queenstown and Invercargill!
Thank you for a very warm (and also very cold) welcome.
It’s not too late to register if you're interested in attending our annual roadshow, please click here to see our remaining dates and locations!
Legal and regulatory update for the life and health insurance sector
27 Jul 2023 - The Council of Financial Regulators (CoFR) released a vision statement https://www.cofr.govt.nz/news-and-publications/financial-regulators-set-vision-for-new-zealand-payments-landscape.html
27 Jul 2023 - The RBNZ publish a supporting position statement expressing concern that New Zealand’s banking and payments industries have fallen behind internationally in making real-time payments possible between accounts held at different banks. https://www.rbnz.govt.nz/money-and-cash/future-of-money/payments