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.
Industry-relevant changes as new government is ushered in
With Labour soon to hand over control to a National and ACT led government (perhaps with support from NZ First), the question on everyone’s lips is what does this mean for our sector?
National have previously come out against the proposed Income Insurance Scheme, with Christopher Luxon calling the levies required to fund the scheme a ‘job tax’. One of National’s 100 day action plan pledges is to stop work on the so-called ‘job tax’. This change could be seen as a positive move as last year Risk Info NZ ran a poll with 80% of respondents not supporting the introduction of a state-backed income insurance scheme.
National promised to repeal the Conduct of Financial Institutions Act (CoFI), due to come into force in March 2025, which they’ve said “makes credit more expensive and harder to obtain even for basic services such as overdrafts and mortgages”. Meanwhile, Katrina Shanks, chief executive of Financial Advice NZ, has said it would be ‘preferable’ to tweak CoFI, rather than scrap it altogether, as the industry is very supportive of legislation that endorses good conduct and culture within the sector.
National has promised to roll back measures brought in by Labour including the Credit Contracts and Consumer Finance Act (CCCFA), with their rebuilding the economy plan saying they will “Cut financial red tape that is stifling investment, including significantly reducing the scope of the CCCFA which has restricted access to credit.”
National has said they will allow people to split their KiwiSaver between multiple providers, which they say will ‘drive innovation, boost competition and put downward pressure on fees’, though industry players have reservations around the complexity and added costs of doing this. Another tweak to the KiwiSaver scheme they have promised is allowing young people to use their retirement savings to pay a rental bond. Instead of tinkering with the scheme, the FSC is instead calling for a comprehensive review of KiwiSaver settings.
One of the agenda items on National’s 100 day action plan is to remove the Reserve Bank’s dual mandate (of managing inflation and supporting maximum sustainable employment) to get the RBNZ purely focused on getting inflation down to targeted levels.
From a health perspective, National’s 100 day action plan includes extending free breast cancer screening for women aged up to 74, from the current cutoff of 69 years of age. National have said they will allocate $280 million in ring-fenced funding to PHARMAC over four years to pay for 13 cancer treatments not currently funded in NZ. National have said they will deliver faster access to mental health services through their Mental Health Innovation Fund, which will initially see up to $20 million in matching funds distributed to community mental health organisations who are delivering strong results for Kiwis in need. They have pledged to extend free postnatal stays for mothers of newborn babies to three days and provide free continuous glucose monitors to type 1 diabetics aged under 18.
National’s five major targets for health will be:
· Shorter stays in emergency department – 95% of patients to be admitted, discharged or transferred from an emergency department within six hours.
· Faster cancer treatment – 85% of patients to receive cancer management within 31 days of the decision to treat.
· Improved immunisation – 95% of two-year-olds receiving their full age-appropriate immunisations.
· Shorter wait times for first specialist assessment – a meaningful reduction in the number of people waiting more than four months to see a specialist (target to be set in government).
· Shorter wait times for surgery – a meaningful reduction in the number of people waiting more than four months for surgery (target to be set in government).
To attract and retain more healthcare workers they have said they will incentivise more people to study nursing and midwifery with a bonding scheme that will pay their student loan for five years if they commit to working in New Zealand. They have said they will establish a relocation support scheme, offering up to 1000 qualified overseas nurses and midwives relocation grants worth up to $10,000 each to support their move to New Zealand. National have pledged to establish a third medical school at the University of Waikato, with satellite training centres in regional areas. They’ve also said they will increase the number of medical school placements at Auckland and Otago by a total of 50 per annum from 2025.
We will be closely following these proposals and will report back as and when things change.
More daily news:
Chubb Life underwriting masterclass 24 October
FMA publishes latest 'Money with Mary' about investing more ethically
NZ's annual inflation rate dropped to 5.6% in September, from 6.0% in June
More people worldwide are now dying of non-melanoma skin cancer than melanoma
AIA updates the benefits of its living products
AIA has released a raft of changes updating the benefits that apply to its living products covering critical conditions, progressive care, life cover, and family protection, including changes to selected closed Sovereign, TotalCareMax, AIA Trauma and AIA Life Cover products.
Some of the key changes, which are applicable to new claim events on or after 10 October 2023, include:
· The minimum coverage age for standalone children’s trauma has been lowered from two years to three months.
· Extension of the life buyback reinstatement period from 30 to 60 days.
· Removed the benefit for new business that pays on the diagnosis of medically or occupationally acquired HIV, and introduced a new benefit that pays on the diagnosis of advanced AIDS – regardless of transmission method.
· Changed the terminal illness definition to clarify that life expectancy is less than 12 months, despite all reasonable medical treatment.
· Increased bereavement support benefit from $15,000 to $25,000 in cases where there is joint policy ownership.
· Removed the 5% limit to pay up to $20,000 as an early payment if the life assured dies overseas to return their body to either New Zealand or their home country.
More daily news:
Partners Life has updated its underwriting guide
Southern Cross new naming rights sponsor of Wellington Round the Bays
nib says insurance can help families navigate increasing mental health concerns
MAS appoints Matt Harvey as Chief Distribution and Marketing Officer and Craig Ward as Chief Innovation and Digital Officer
FSC webinar 'Leading Lawyers Australia' 31 October
Jon-Paul Hale believes some providers are asking advisers for too much
ACC fund slips from ‘responsible investment leaders’ to ‘responsible investors’
New AI tool diagnoses brain tumours on the operating table and helps surgeons decide how to operate
nib release 2023 sustainability, community and climate-related disclosure reports
nib Group have released their 2023 sustainability, community and climate-related disclosure reports. Some highlights from the reports include:
· 25,990 HealthChecks were undertaken by nib members.
· Employee Experience Surveys in FY23 found an overall engagement score of 81%.
· 289 staff volunteered 1,546 hours across 14 charities.
· 34 suppliers completed continuous improvement plans to manage modern slavery risk.
· The strategic procurement team has taken a proactive step toward reducing nib’s carbon footprint by introducing environmental criteria into the Request for Proposal (RFP) process.
· nib introduced a new values-based employee recognition program where all employees have the opportunity to nominate their colleagues and vote on the most extraordinary achievements.
· nib worked with Ngāti Whātua Ōrākei to facilitate the ‘Cultural Coalition’ Program (Whatua te Aho Tukurua). This six-week program teaches participants Māori language and values, encouraging employees to integrate these learnings into regular work activities and practices.
· Gender pay equity gap has reduced to 2.75%.
· 985 Kiwis visited Clearhead’s Te Reo Māori website and chatbot
nib has identified climate-related risks including:
· increased market pressure to provide community support and insurance affordability for those experiencing climate hazards;
· increased illness & comorbidity due to chronic and compounding climate change hazard;
· trauma, illness, property destruction and disruption leading to high rates of psychological distress;
· increased incidents and severity of climate hazards causing pressure on discretionary income;
· chronic and compounding climate change impacts putting pressure on health services;
· energy and emissions performance standards creating compounding capital expenditure and operational costs;
· limitations of current regulatory and pricing mechanisms to respond to climate hazards;
· risk nib won’t meet growing mandatory reporting and regulatory requirements.
nib has developed a risk-management framework to manage and mitigate its material risks, and their board and management regularly identify and analyse risks and the effectiveness of the controls in place to manage these risks.
More daily news:
FinTech NZ is asking members to fill in their 2024 New Zealand Fintech Pulsecheck Survey
mySolutions webinar 'Roles and responsibilities of Directors' 9am 18 October
Open letter to Pharmac saying the chief executive and the chairman need to step down
Financial Advice New Zealand release ‘Value of Financial Planning Consumer Research 2023’ report
Financial Advice New Zealand’s latest study on the value of financial planning has been released. The study was undertaken in February 2023 and questioned 1,001 New Zealanders over 25 years old who earned over $90,000 per annum or held over $50,000 of investable assets on the value of working with a financial planner.
Some highlights from the report include:
· 68% of clients of financial planners are highly satisfied with their wealth versus 33% of unadvised consumers.
· 9 in 10 of those who have seen a certified financial planner feel financially secure.
· 9 in 10 clients of certified financial planner say the benefits of financial planning outweigh the costs.
· Those who haven’t engaged with a financial planner report unmet financial needs, with 2 in 5 worried about enough money to live on, 1 in 3 worried about the ability to live their desired lifestyle and 1 in 3 not having a realistic plan for a comfortable retirement.
· 99% of those who have engaged a certified financial planner trust they are acting in the client’s best interest
· 100% of those who have engaged a certified financial planner are likely to continue the relationship with their financial planner.
· Clients reported the top benefits of working with a financial planner as better financial decision-making confidence; having simplify and explain financial matters; improved financial wellbeing and peace of mind; improved confidence in ability to achieve desired standard of living.
The report also has some interesting information on the different ways different generations like to engage with financial planners.
More daily news:
AIA special offer could save clients up to 31% in premiums
Partners Life is switching to email communication for customers who want it
Katrina Shanks writes of findings on the value of financial planning services
Katrina Shanks is confident she's leaving Financial Advice NZ with a good framework in place
mySolutions are holding roadshows across the country in November
Official Cash Rate remains at 5.50%
FSC calls for a comprehensive review of KiwiSaver
Nominations for Insurance Business’s annual Elite Women are open
Malcolm Mulholland laments the lack of funded medicines in NZ
Sleep regularity is important for longevity
Accuro and Unimed have announced a proposal to combine
The boards of Accuro and Unimed have signed a Letter of Intent to transfer the Accuro insurance portfolio to Unimed and to combine the two not-for-profit mutual societies. The proposal is subject to regulatory approval from the Reserve Bank of New Zealand and support of Accuro members.
If the merger goes ahead, UniMed would become the country’s third largest medical insurer with over 140,000 member customers.
Accuro’s Chair Marion Guy says
“We believe combining the resources and capabilities of the two societies creates a more sustainable and resilient health insurance offering than Accuro could offer alone.”
Unimed’s Chair Peter Tynan says
“This proposal will provide opportunities to create efficiencies and develop new services and products – something that will be increasingly important given increasing costs and demands for health services.”
More daily news:
Crombie Lockwood changing their name to Gallagher Insurance
FinTechNZ Executive Council Nominations 2023 close 19 October
Allianz Global Wealth Report finds those with lower level money skills tend to allocate more to cash
Southern Cross 2023 AGM will be held on 6 December
Financial Advice NZ Nelson/Canterbury Regional Meeting 18 October
'Using the FSC Code to support a strong customer-focused culture' webinar 17 October
Tony Vidler writes about the buying journey of clients
mySolutions webinar 'Jeanette Kreft - The Compliance Company' 9am, 11 October
FSC release Money & You: Young People and the Cost of Living report
The Financial Services Council (FSC) have released ‘Money & You: Young People and the Cost of Living’ report. The report found that Gen Z and millennials had lower levels of financial wellbeing, financial literacy and financial confidence than older respondents. Some of the key findings from the report include:
Mental health and wellbeing is the number one health concern for both Gen Z (78%) and millennials (52%), with nutrition coming in second place and oral/dental health coming in third place.
61% of Gen Z and 52% of millennials worry about money daily or weekly, compared to only 29% of baby boomers.
Buy now, pay later (BNPL) and personal loans are more likely to cause Gen Z and millennials issues than other age ranges.
Only 42% of Gen Z and 51% of millennials would be able to access $5,000 in a time of emergency without going into debt.
41% of Gen Z and 58% of millennials feel very or somewhat confident about planning for their retirement despite 74% of Gen Z and 61% of millennials not having calculated how much money they need in retirement. 45% are contributing the minimum 3% to their KiwiSaver.
52% of Gen Z and 72% of millennials feel very or somewhat confident about choosing an insurance policy. 28% have life insurance, 13% have income protection insurance, 31% have health insurance, 7% have total and permanent disablement insurance and 11% have trauma or critical illness insurance.
More daily news:
Tim Grafton has announced his intention to step down from his position of chief of ICNZ next year
ANZIIF has announced the list of finalists for the New Zealand Insurance Industry Awards.
This week is World Investor Week and NZ's theme is ethical investing
MinterEllisonRuddWatts share legal tips for FinTech start-ups
FMA focus on fair dealing and the key takeaways for insurers
MinterEllisonRuddWatts have highlighted some key points for insurers in light of the FMA’s focus on fair dealing. Since June 2020, the FMA has brought five proceedings in relation to breaches of the fair dealings provisions in Part 2 of the Financial Markets Conduct Act 2013 (FMCA) against insurers making representations to customers admitted to be false or misleading. Examples involved systems failures in relation to not applying discounts or benefits correctly, cover cessation/duplication or charging premiums after termination of policies or incorrect inflation adjustments. Often, statements made through marketing materials, invoices or policy anniversary letters were not delivered on, so the FMA considered this a false or misleading representation to customers. Several of these cases were self-reported to the FMA with steps already undertaken to remedy systems issues and compensate customers.
Both the FMA and the Courts have been focused on deterrence, using penalties to encourage entities to maintain adequate processes and systems. Customer remediation to date since the FMA’s Conduct and Culture reviews in 2018 and 2019 has now reached $161.3 million, impacting more than 1.51 million consumers. To date, the largest penalty imposed was $3.575 million on Cigna Life Insurance New Zealand. Three alleged breaches are ongoing investigations, but in all cases the FMA is seeking declarations and pecuniary penalties.
MinterEllisonRuddWatts highlight three key learnings for insurers:
1) Invest sufficiently and regularly into your systems to ensure they are reliable and fit for purpose;
2) Systems need to be regularly checked for issues, and any issues need to be appropriately escalated;
3) Substantiate all marketing claims and ensure underlying systems and processes are cable of delivering what is promised.
More daily news:
Financial Advice NZ Nelson/Canterbury Regional Meeting 18 October
Katrina Shanks writes of how to deal with relationship strain around financial concerns
The primary test for cervical screening has changed to a HPV test, with the option of self-testing
Q&A with the Financial Advice NZ Risk Board Member Director (Risk) nominees
Sonja is self-employed, working under the SHARE FAP, advising clients on Risk and KiwiSaver investment. Sonja has over 20 years’ experience in the Financial Services industry and is also a Director at Habitat for Humanity, a Chairperson for Migrant Connections Taranaki Charitable Trust and a Justice of the Peace.
What attracted you to the insurance industry?
I love the flexibility and lifestyle that the industry offers, especially when you are self-employed, as well as the social aspect, meeting new people/clients, some of whom become lifelong friends.
If you were elected Member Director (Risk), what would your key priorities be?
Key priorities for me would be looking at a pathway for young people to join the industry, continuing to educate and assisting advisers navigating the new regulatory environment as well as looking at new strategies to maintain and enhance the wellbeing of advisers.
What is one thing you wish someone had told you when you were younger?
The one thing I wished someone had told me: don't sweat the small stuff… we worry about too many things sometimes, instead of looking at the big picture.
What’s the last book you read?
I read a lot of books, but the last book I read is 'Sand talk" by Tyson Yunkaporta, the author asks what happens if we bring an indigenous perspective to the big picture - to history, education, money, power? Can we, in fact, have proper concepts of sustainable life without Indigenous knowledge? He challenges us to think differently - a great read I picked up on my last visit to Sydney.
Zebunisso Alimova
Zebunisso has a variety of experience in the financial services sector, starting off in banking and now owning a Mike Pero Franchise. Zebunisso was recognised as one of MPA’s top advisers in New Zealand 2022 and 2023.
What attracted you to the insurance industry?
The insurance industry, in my view, represents a unique intersection of financial services, risk management, and the profound impact it can have on individuals and businesses. What truly attracted me to this industry is the opportunity it provides to make a real difference in people's lives. Insurance is about offering peace of mind, security, and a safety net when the unexpected occurs.
My journey into insurance began during my tenure at ASB Bank, where I witnessed firsthand how crucial insurance products were to our clients' financial well-being. I was drawn to the industry's ability to provide tangible protection against life's uncertainties, whether it's safeguarding a family's future, ensuring the survival of a business during challenging times, or offering stability in retirement.
Moreover, insurance isn't just about selling policies; it's about building trust, understanding clients' unique needs, and tailoring solutions to fit those needs perfectly. This client-centric approach resonated deeply with me, aligning with my core values of empathy and service.
The insurance industry is dynamic, constantly evolving to meet the changing needs of our society. This dynamic nature challenges me to continually learn, adapt, and innovate, making each day in the industry an exciting and fulfilling experience.
If you were elected Member Director (Risk), what would your key priorities be?
If I have the privilege of being elected as Member Director (Risk), my key priorities would revolve around enhancing the overall risk management framework within Financial Advice New Zealand. I believe that a proactive and comprehensive approach to risk management is essential for the sustainable growth and success of any organization. Here are some key priorities I would focus on:
1. Fresh Perspectives and Strategic Thinking: As mentioned in my video statement, I aim to bring fresh perspectives and strategic thinking to the role of Member Director (Risk). This approach involves looking at risk management from new angles, exploring innovative solutions, and ensuring that our risk management strategies align with our strategic objectives.
2. Diplomatic Voice for Collaboration: In the video, I emphasized the importance of maintaining a diplomatic voice that fosters collaboration and consensus-building within the organization. Effective risk management often requires input and cooperation from various stakeholders. I would work diligently to ensure that all voices are heard and that decisions are made with the best interests of the organization in mind.
3. Addressing Industry Challenges: I am acutely aware of the challenges the industry is currently facing, such as the struggle to attract young talent due to evolving regulations. These challenges were discussed in my video statement, and I am committed to addressing them both as a business owner and as an advocate for our industry's growth. This includes exploring ways to make our industry more appealing to emerging professionals.
4. Client-Centric Approach: Just as I emphasized the importance of a client-centric approach in my video statement, I believe that risk management should ultimately serve the best interests of our clients. This means ensuring that our risk management practices protect our clients while also allowing them to access the products and services they need.
What is one thing you wish someone had told you when you were younger?
If I could impart one piece of wisdom to my younger self, it would undoubtedly be the importance of securing a fixed-rate loan when interest rates were historically low, such as the opportunity to fix the loan for five years when rates were at 2%. This financial decision can have a significant impact on one's long-term financial stability and mortgage affordability.
Understanding the intricacies of interest rates and financial planning early in life can empower individuals to make informed decisions that set them on a path to financial security. It's a reminder that even seemingly small financial choices can have a substantial cumulative effect on one's financial well-being over time. Planning for the future, whether through smart borrowing or prudent saving and investing, is a key lesson I've learned and would encourage others to embrace.
What’s the last book you read?
The last book I read was "French Village Book Lovers." This delightful book by Martin Walker takes readers on a journey through the charming villages of rural France. It's a captivating exploration of the intersection between French culture, history, and the love of literature. As someone who values cultural diversity and the enrichment that comes from literature, this book was a delightful and enlightening read. It reinforces the idea that books have the power to connect us with different worlds and broaden our perspectives, much like the diverse and dynamic field of finance, which I'm passionate about.
More daily news:
Good returns article lists some pros and cons to AI use in the financial services industry
The primary test for cervical screening has changed to a HPV test, with the option of self-testing
How intermediaries can prepare for CoFI
MinterEllisonRuddWatts has published an article on how intermediaries can prepare for CoFI.
They define who qualifies as an intermediary and a consumer; outline insurers’ obligations in setting up and maintaining a fair conduct programme; outline what intermediaries can expect financial institutions to ask them for when assessing distribution methods; give examples of what contractual agreements should contain in terms of expectations, commissions, assurances and how to remedy deficiencies; highlight the need to review internal policies.
They make the point that intermediaries which are FAPs warrant a lower level of controls in relation to their distribution arrangements, as they are already regulated and pose a lower level of risk.
If you’re still getting your head around CoFI obligations, we recommend you check it out.
More daily news:
Grant Robertson reconfirms that the NZIIS is still on hold
Registrations open for Financial Advice NZ’s Thrive 2024 Annual Conference 5 – 6 March
Voting for Financial Advice NZ Board Member Director (Risk) is open
Katrina Shanks writes about teaching children financial literacy
Partners Life ‘new adviser’ online training course starts 16 October
Oncologists write an open letter to Pharmac, advocating for newer and better-funded medication
AIA has released 2022 Claims Data
AIA has released their annual claims data for 2022.
93% of all claims received were accepted.
Paid $646.4 million in claims.
Broken down this comes to $121.5 million in Health claims, $233.8 million in Life claims, $111 million in Trauma claims, $74.4 million in Income Protection claims and $15.3 million in Total Permanent Disablement claims paid.
Over 30,000 health claims were submitted online via the myAIA customer self-service portal.
Life insurance accounted for 42% of all claims.
For those aged 20 - 29 accidents are the main claim for life cover while the main claim for life cover in those aged 30 - 59 is cancer.
Over 815,000 New Zealanders are covered by AIA.
More daily news:
AIA announces major expansion of its gym network
Jon-Paul Hale questions fairness of AIA moving policies after a couple separates
Study finds good financial advice could add almost 6 per cent to New Zealanders’ wealth in 2023