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.
The role of FAPs in building consumer confidence in the professional advice sector
On Wednesday I had the pleasure of listening to industry professionals discussing ‘The role of FAPs in building consumer confidence in the professional advice sector’, a lunchtime event sponsored by Chatswood Consulting, at the Financial Services Council's Building Consumer Confidence Conference.
Chatswood Consulting would like to extend our thanks to the speakers on the panel for their time and sharing their insights with us:
• Michael Hewes - Director of Deposit taking, Insurance & Advice, FMA
• Susan Taylor - CEO, FSCL
• Hannah McQueen - Author & Founding Director, AdviceFirst / Enable.me
• Ryan Edwards - Managing Director, The Adviser Platform
• Trecia Brown - Head of Customer Outcomes, New Zealand Financial Services Group
Michael spoke about how we have 1407 licenced FAP’s, and how the FMA has around 40 new licences on the go at any time. He mentioned that as advisers you might be helping vulnerable people and to try and make communications as easily understandable as possible, everything from making sure the font size is large enough to be easily read to using simple language.
Trecia spoke about how we need to use systems and processes to keep customer data safe, keep our language positive, build a risk aware culture and how we can manage complaints and use them to improve service. Trecia also spoke about the need to work together as an industry to promote the value of advice.
Ryan spoke about a shift in language from compliance to governance. This helps to change our view from one of merely achieving a base level of compliance to a wider vision of compliance assurance, and leadership by using customer focused principles to guide development of a culture – more like ‘how we do things here’ rather than meeting an externally imposed requirement.
Susan spoke about how we should be talking with customers about our complaints processes and how we have an independent, external complaints process before there’s ever a cause for complaint, so we can build confidence that should anything go wrong customers know what to do about it and are confident it will be handled fairly and well. Susan recommends that advisers put themselves in the shoes of the reader of their communications – would they understand it? Will it have jargon in it they may not understand? Susan mentioned the possibility of using alternative communication forms, such as videos, to help get your message across clearly.
Hannah spoke about how when you have a product you’re proud of you have to be able to articulate it to customers in a way they can understand. It was interesting to hear her expand by talking about ways to track how well the client is on track: are they achieving what they set out to achieve in the plan? Keeping these in view, checking in, and seeing how to course correct to achieve them is a good guide to ensuring they stay customer focused.
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Ultra-Processed Foods and their negative impact on health
Ultra-processed foods (UPFs) are getting a (deservedly) bad rap. Often high in fats, sugar and/or salt, they are energy-dense and nutrient-poor. They have generally undergone intense processes (like high-temperature extrusion or hydrogenation) and usually contain food additives and/or industrial ingredients like colours, artificial flavours, emulsifiers and preservatives. If you don’t recognise some of the ingredients on the label as food, then it’s likely to be an UPF. They are manufactured to be cheap, convenient and have a long shelf life.
They’re ubiquitous in our food chains. Walk the aisles of your local supermarket and so much of what is on the shelves can be considered a UPF. They can be foods mistakenly considered healthy (flavoured yoghurts, cereals) to products we all know aren’t good for us (here’s looking at you, fizzy drinks and frozen pizza). Some estimates have found more than half our diet is now composed of UPFs.
During a cost of living crisis, UPFs can often be a cheap, quick way of filling bellies – not everyone can afford to avoid them or has the time to cook meals from scratch every day.
So why should we limit our intake of UPFs?
In a 2020 review of 43 studies on UPF consumption and health outcomes, 37 studies found at least one adverse health outcome. There’s increasing evidence linking UPF intake and chronic conditions, in particular obesity, but also cancer and depressive symptoms. Studies have found that people who consume more UPFs have higher risks of cardiovascular disease, coronary heart disease, and cerebrovascular disease. Studies following large groups have worrying conclusions
2019 BMJ study of more than 105,000 people followed for five years found that for every 10% increase in the amount of ultra-processed foods participants ate, their risk of heart attack or stroke went up by 12%. And another 2019 BMJ study, this one involving almost 20,000 people followed for 10 years on average, found that participants who ate more than four servings of ultra-processed foods per day had a 62% higher risk of dying during the study (from any cause) compared with those who ate two servings per day.
There’s evidence that UPFs are very addictive. They’re engineered to be hyper-palatable so you want to eat more of them. Vast amounts of money are spent by food manufacturers, fine-tuning formulations to find the best taste. Research has found some UPFs can elicit cravings, loss of control and an inability to cut back. There’s also increasing evidence that a diet high in UPFs leads to increased energy intake and weight gain.
Even the packaging can be a concern, with one study finding higher consumers of UPF had higher urinary concentrations of phthalates and bisphenols that may have migrated from the food packaging.
With UPFs being compared to other public health crises like tobacco and opioids, some groups are calling for public health interventions that go beyond education, saying that UPFs meet the criteria requiring regulation – abuse, toxicity, ubiquity and externalities (how does your consumption affect me?).
My pick is we’re going to start seeing more backlash against UPFs as more research showing how bad they are for us comes out.
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Suncorp New Zealand made an after-tax profit of $115m for the year to 30 June
Suncorp New Zealand made an after-tax profit of $115m for the year ended 30 June 2023. This was down 30% compared to the previous year.
Asteron Life performed well, making a profit of $50m, up $35m from the previous year. Asteron Life saw a 25% increase in new business and in-force premium growth of 6.7%.
Asteron Life’s Executive General Manager, Grant Willis, points to the support and engagement from independent financial advisers as one of the key factors in new business growth.
“We value our relationship with advisers and the partnership they have with us in supporting customers through every part of their life Insurance journey, from new business through to claims.
We were independently rated number 1 this year for adviser relationships and claims management, with our adviser net promotor score (NPS) rising from 44% to 66%. This has contributed to a new business market share increase from 10.5 % -11.3% (March figures).”
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Fidelity Life announce Career connect Scholarship Recipients
Fidelity Life have announced the seven successful scholarship recipients for Career connect’s second intake. Career connect focuses on helping people from groups traditionally under-represented within the financial services sector to gain the qualifications and skills necessary to become a financial adviser.
Pounamu scholarship - to assist an outstanding Māori applicant: Josh Los’e (Ngāti Maniapoto), Auckland.
Kōwhai scholarship - to assist an outstanding Pasifika applicant: Nimmi Valia, Auckland.
Rangi Po Scholarship - to assist an outstanding applicant from other under-represented communities within financial services: Naveen Bhatia, Glenbrook.
Toe Toe scholarship - designed to assist an outstanding applicant aged 21-25 years old: Kiri Venkatesh, Auckland.
Pāua scholarship – to assist an applicant who demonstrates excellence in their submission: Chloe Balderstone, Lincoln.
Rural scholarships, brought to you by FMG – to assist two outstanding applicants with a rural connection:
Sara Buerki, Dunedin.
Alice Perry, Oamaru.
The current intake will complete the 6-month long programme in December 2023. The first intake of Career Connect graduates have completed their training programme and achieved their level 5 certificate in financial services.
Career connect graduates
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Financial Advice NZ webinars 'The ever-evolving credit landscape: Trends, future predictions and informed decisions' 23 August and 'Rising financial capability and improved financial literacy - key findings from Massey University's longitudinal research study' 30 August
mySolutions roadshows 'To sink or swim: the power of prospecting' in September
mySolutions webinars 'Simple wills' 9 August 9am and 'Creating balance in your life and work' 16 August 9am
The Australian Competition & Consumer Commission denies the sale of Suncorp Bank to ANZ
TSB Bank is closing seven of its branches
Long Covid disproportionately affecting women, who struggle to get a diagnosis and treatment
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Changes to IFSO terms mean more consumers will be able to access free dispute resolution
Effective 1 September 2023, changes to the Insurance & Financial Services Ombudsman Scheme (IFSO Scheme) and its terms of reference (TOR) and constitution will mean more consumers will be able to access IFSO services.
Once the changes take place, IFSO will be able to investigate insurance claims complaints and financial services’ products complaints up to $350,000+GST, or $2,625+GST per week for regular payments. This is an increase from current limits of $200,000+GST and $1,500+GST respectively.
Insurance & Financial Services Ombudsman Karen Stevens said
“Previously, anyone with a claim over the limit of $200,000 would have had to pay for legal representation to take their case to court.
Court proceedings are not cheap and they’re certainly not free – like the IFSO Scheme process. The changes bring us into line with some other dispute resolution schemes in the financial sector, and will mean a number of extra cases are now eligible for us to look at.”
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Chubb Life release claims statistics for 2022: 93% of all claims received were paid
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Kate Dron believes there will still be more mergers and acquisitions in NZ insurance space
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Linley Wood appointed as an Independent Director on the Chubb Life NZ Board
Official unemployment rose to 3.6% in the June quarter
Hospital ED shuts doors due to ‘doctor shortages’
Calls for bowel cancer screening age to be lowered
Government has made some progress on reducing health waitlist times
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.”
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The government has injected a further $225 million of capital into Kiwibank
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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.
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Registrations open for Partners Life’s 3-day New Adviser Training Course
Partners Life have created a New Adviser Training Course to support and encourage those new to the industry. The three-day course runs from 21 – 23 August and will help ensure advisers are better positioned to discuss the types of interruptions to lifestyle clients might encounter, the corresponding financial impact and the types of products that best mitigate those risks.
The eligibility criteria are:
• Level 5 qualified or near completion
• Less than 12 months industry experience
• Registered on the Financial Services Provider Register (FSPR)
Those on the course will be provided with pre-requisite eLearning modules to complete prior to the course starting.
A full schedule of the three days can be found here. You can register to attend here, registrations close 31 July.
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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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Submissions for ANZIIF Making a Difference Awards for 2023 now open
Second quarter inflation falls to 6%, from 6.7% in first quarter
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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