Gail Costa talks about how the public need a better understanding of insurance

Gail Costa, chief executive of Chubb Life New Zealand, has spoken to Insurance Business Mag about how the public need to gain a better understanding of the industry during their schooling years to attract more people into the industry. Costa suggests that university courses should be offered around insurance. Costa said

“I’m sure that people don’t really understand insurance because we don’t teach it in school. We know from New Zealand being underinsured that there’s a financial literacy issue. Let’s talk about what the industry does and how it works.”

More daily news:

AIA NZ selects new fund and existing unhedged equivalent for inclusion in its global equities’ investment portfolios

Toby Kelly named as the recipient of the 2023 ICNZ and ANZIIF Scholarship

The Westpac McDermott Miller Consumer Confidence Index rose 8.7 points in December to 88.9

The number of people hospitalised with Covid-19 and the average daily case count have jumped

Southern Cross hospitals are closed from Friday 22 December - Monday 15 January

nib announce product refresh

nib have announced changes to most of their legacy and on-sale retail and group health products. One of the reasons for the move was to better align the benefits of their legacy and on-sale products, to make it easier and quicker to process claims, and in doing so, reduce costs and help contain premium increases. Changes to client’s cover will take place on their next policy anniversary, commencing from 1 February 2024 and then over the following 12 months.

Changes include:

·         aligning many of the benefit terms of the retail and group health cover benefits to those of Ultimate Health

·         aligning benefit maximums of the legacy products to those of the comparable on-sale product

·         Group cover benefit terms will also be refreshed

·         small enhancements to Ultimate Health Max and Ultimate Health benefit terms.

Adviser FAQ’s are here and more details about the changes are included in the supporting collateral available on nib’s adviser portal, in the Public Documents tab under Product Refresh Documents.

More daily news:

Public health officials urge kiwis to get Covid-19 boosters as Covid-19 numbers increase

Almost 3000 enrolled patients in Southland about to lose their GP after efforts to find a replacement were unsuccessful

New assessment tool could transform the diagnosis of dementia in Māori kaumātua

Legal and regulatory update for the life and health insurance sector

13 Dec 2023 - The Reserve Bank of New Zealand acknowledges the amended Remit for the Monetary Policy Committee (MPC) issued by the Minister of Finance. The MPC Remit sets the operational objectives for monetary policy. The amended Remit retains an inflation target of 1% to 3% over the medium-term, with a focus on the 2% mid-point, and removes the objective to support maximum sustainable employment. https://www.rbnz.govt.nz/hub/news/2023/12/monetary-policy-remit-amended

14 Dec 2023 - The Reserve Bank of New Zealand has issued a formal warning to Citibank N.A. New Zealand Branch (Citibank NZ) relating to the wire transfer identity requirements under the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act 2009.   https://www.rbnz.govt.nz/hub/news/2023/12/citibank-nz-issued-formal-warning-under-aml-cft-act

14 Dec 2023 - FMA offices are closed from midday, Friday 22 December, and will reopen 8.30am, Monday 8 January 2024 https://www.fma.govt.nz/contact/christmas-2023-holiday-hours/

14 Dec 2023 - The FMA has censured Go Financial Solutions Limited for failing to comply with several obligations under its financial advice provider (FAP) licence.  Go Financial Solutions is a Christchurch-based FAP that provides advice on health, life and business insurance and mortgage lending. During a monitoring review earlier this year, the FMA found that Go Financial Solutions:

• Had inadequate record keeping in relation to advice given to its clients

• Failed to gather sufficient information about a client’s circumstances and was unable to demonstrate that recommendations made to clients were suitable 

• Failed to ensure its clients understood the financial advice they received

• Failed to exercise care, diligence and skill when providing financial advice to its clients. 

https://www.fma.govt.nz/news/all-releases/media-releases/fma-censures-go-financial-solutions/

14 Dec 2023 - The Australian Prudential Regulation Authority (APRA) has released the bi-annual life insurance institution-level statistics publication. https://www.apra.gov.au/news-and-publications/apra-releases-life-insurance-institution-level-statistics-0

14 Dec 2023 - APRA and ASIC have released an update to life insurers and friendly societies (life companies) on premium increases in the life insurance industry. https://www.apra.gov.au/news-and-publications/apra-and-asic-release-an-update-on-premium-increases-life-insurance-industry

15 Dec 2023 - Michele Embling, Chair of the External Reporting Board (XRB), has announced that the Climate-related Disclosures standards have now been published. https://www.xrb.govt.nz/news/latest-news/

15 Dec 2023 - ASIC today published its annual dashboard of regulatory costs for 2022-23 by activity for each sector and subsector under the industry funding model (IFM). https://asic.gov.au/about-asic/news-centre/news-items/asic-industry-funding-release-of-2022-23-annual-dashboard-and-summary-of-variances/

15 Dec 2023 - The Council of Financial Regulators has released an updated Regulatory Initiatives Calendar for the financial sector for Q4 2023. https://www.cofr.govt.nz/files/regulatory-initiatives-calendar/regulatory-initiatives-calendar-q4-2023.pdf

19 Dec 2023 - The Government is introducing and progressing under urgency a Bill to repeal the Taxation Principles Reporting Act 2023 https://www.beehive.govt.nz/release/government-introduces-taxation-principles-reporting-act-repeal-bill

19 Dec 2023 - Health Minister Dr Shane Reti is appointing a Crown observer to Health New Zealand – Te Whatu Ora https://www.beehive.govt.nz/release/crown-observer-be-appointed-health-new-zealand

19 Dec 2023 - The Climate Governance Initiative summarises the key pieces of information relevant to board directors from the UAE Consensus that was agreed in Dubai at the COP28 climate conference, to help directors understand the implications on business strategy and investment decisions. https://www.chapterzero.nz/news/cop28-key-outcomes-for-board-directors/

19 Dec 2023 - The Taxation Principles Reporting Act Repeal Bill had its First Reading https://bills.parliament.nz/v/6/9faa9e21-c7a9-4433-7e32-08dc003a05e3?Tab=history

A year in review

2023 has been a difficult year for consumers and businesses alike. Conditions are similar to last year, with inflation remaining high, resulting in a continuing cost-of-living crisis, the OCR set at 5.5% and the RBNZ not ruling out a further hike next year, and housing prices only just starting to rise. How has that affected the insurance sector? Combined with an increase in regulatory red-tape tangling up banks, there has been a spike in lapse rates that very much looks like it is driven by the same forces.

NZ was badly affected by natural disasters this year, with insurers having to fork out $3.5 billion in general insurance claims for the Auckland Anniversary Weekend floods and Cyclone Gabrielle. Such heavy claims have impacted general insurers, perhaps part of the reason why Tower is looking to do a strategic review of its ownership structure.

It is this situation which greets the new National-Act-NZ First coalition government. They  have outlined a 100-day plan that includes: stopping work on the Income Insurance Scheme; introducing legislation to narrow the Reserve Bank’s mandate to price stability (removing the mandate to ensure maximum sustainable employment); signing a memorandum of understanding with Waikato University to progress a third medical school; disestablishing the Māori Health Authority; taking the first steps to extend free breast cancer screening to those aged up to 74; repealing amendments to the Smokefree Environments and Regulated Products Act 1990 and regulations; and setting five major targets for the health system. National promised to roll back the Credit Contracts and Consumer Finance Act (CCCFA) and to make changes to allow kiwis to split their KiwiSaver savings between different providers during the election campaign, so we will be watching how this plays out next year. In August, then National Party Leader, Chris Luxon, told the Financial Services Council conference that it was also their intention to repeal the Financial Markets (Conduct of Institutions) Amendment Act 2022. That hasn’t explicitly made it into the coalition agreement, but may possibly be covered by the planned regulation sector reviews to which the coalition commits under the Act Policy Programme. Although regulatory relief is often welcomed by the sector, so is long-term stability, so we have found views split on the proposed changes to the conduct law.

As of March 2023, all financial advice providers needed to have obtained their level 5 certificates to continue operating this year. We wrote about the impact of this on the market and just how many financial advice providers and financial advisers there are in the September 2023 Quarterly Life and Health Sector Report.

Accuro and Unimed members voted in favour of combining operations. Approval from the Reserve Bank of New Zealand is likely to come early next year. The Lifetime Group acquired Protection Solutions. Fidelity Insurance, formerly known as Westpac Life, was integrated into the Fidelity Life Assurance Company. In March 2023 Cigna NZ changed its name to Chubb Life Insurance New Zealand Limited (Chubb Life NZ) and is now trading under the Chubb brand. nib have told customers they are planning to amalgamate, with their health insurance company ‘nib nz limited’ and their life and living insurance company ‘nib nz insurance limited’ combining to form one single company known as nib nz limited. The acquisition of Partners Life by Dai-Ichi has been made more real by the appointment of new personnel and the announcement of Naomi Ballantyne’s change of role to come in 2024.  The Association of Financial Advisers (AFA) and the Financial Planning Association of Australia (FPA) have announced they will merge to form the Financial Advice Association of Australia. The Australian Competition & Consumer Commission (ACCC) denied the sale of Suncorp Bank to Australia and New Zealand Banking Group (ANZ).

There were some interesting court cases, with AMP settling with Australian advisers for A$100 million; MAS were penalised $2.1 million for making false and misleading representations to customers; Cigna was fined $3.575m for false and/or misleading representations.

There were lots of new faces joining the industry or changing roles this year.

• AIA New Zealand appointed Michele Embling as an independent non-executive Director; Ben Lovelock as Chief Risk Officer; Shaun Baird as Chief Financial Officer; Maddie Sherlock as Head of Customer Operations; Andrew Anisi as Senior Manager Contact Centre & Business Solutions; Aaron Gilmore and Katie Hunter as AIA Vitality Coaches; Calvin Romeo to the role of head of ASB Partnership.

• Asteron Life appointed Kirsten Young as the National Manager Adviser Distribution.

• Chubb Life board chairman Steven Fyfe retired and Paul Brock took over his role as Chairman while Linley Wood joined as an Independent Director to the board. Chubb appointed Monique Ravening as its new Head of Underwriting and Erica Hamer as Chubb's new Wellington-based Business Partnership Manager. Adit Witjaksono was appointed as property manager for Australia and New Zealand.

• Fidelity Life made some new appointments to key roles.  David Winspear was appointed as Head of Channel Strategy, Michelle Doyle appointed as the new Head of Solutions and Kylie Oldham appointed as Senior Group Insurance Business Manager.  Leigh Bennett was promoted internally to the role of Head of Underwriting and Mat Bark was appointed as Head of Channel Enablement. Giselle Baker was appointed as Head of Data and Analytics. In October, Ian Clancy acted as the Acting CEO until Campbell Mitchell was bought on board as the new CEO after Melissa Cantell resigned. Sam Kelly was appointed as Head of Regulatory Affairs.

• MAS appointed Matt Harvey as Chief Distribution and Marketing Officer, Craig Ward as Chief Innovation and Digital Officer, Dan Mead as an Investment Manager.

• nib appointed Stu Crowther as new National Manager – Adviser Distribution; Ian Sargeant as National Manager – Group, Partnerships & Strategy; Chris Carnall as Head of Distribution; Stan Bennetto as Group Health Business Development Manager.

• Partners Life appointed Gemma Vivian as GM Adviser Engagement; Gareth Allen as Senior Manager Adviser Partnerships. Naomi Ballantyne announced her retirement from Partners Life in March 2024.

• Southern Cross Healthcare appointed Mark Phillips as Chief Digital Officer; Dr Erica Whineray Kelly as Transformation Lead for Women’s Health; Jo Fair as Chief of People & Culture; Monica Goldwater as Chief Nursing Officer.

• Suncorp New Zealand appointed Suraiya Phillimore-Smith as its new Chief Customer Officer. Lindsay Tanner was appointed as an independent director of the firm’s three boards.

• Justine Gilliland was appointed to Unimed's board.

• ASB appointed Carl Ferguson Chief Financial Officer and Rebecca James as its new Executive General Manager of Business Banking.

• Westpac welcomed a new GM of Consumer Banking and Wealth, Michael Norfolk.

• Kiwibank appointed Julia Jack as chief purpose and brand officer.

• TSB appointed Kerry Boielle as new CEO after Donna Cooper resigned. Penny Burgess was appointed General Manager Customer Delivery; Molly Auva'a-O'Brien as General Manager Operational Excellence.

• AMP appointed Blair Vernon as CFO.

• Tim Grafton announced he’s stepping down as chief of the Insurance Council of New Zealand next year.

• Tony Dench started as Financial Advice NZ’s interim CEO following Katrina Shanks’ departure to head up The Australian and New Zealand Institute of Insurance and Finance (ANZIIF). Sonja Barrett was appointed as Financial Advice New Zealand’s Board Member Director (Risk) and Peter Fa’afiu was appointed as an Independent Member Director on the Financial Advice NZ Board. Stefanos Boulieris joined Financial Advice NZ, communicating online webinars and the upcoming conference in 2024 and Sarah Maxwell joined as Communications and Social Media Manager.

• Tim Tez and Sarah Phillips joined ANZIIF’s Board of Directors.

• Anna Scott, Ana-Marie Lockyer and Campbell Mitchell all joined the board of the Financial Services Council (FSC). David Bishop was appointed to the Chief Marketing Officer role.

• The FMA appointed Daniel Trinder as Executive Director – Strategy and Design; Michael Hewes as Director for Deposit Taking, Insurance and Advice; John Horner as Director of Markets, Investors and Reporting; Peter Taylor as Director Specialist Supervision and Response; Stuart Johnson as Chief Economist; Sharon Thompson as Executive Director – Transformation and Operational Delivery.

• Graeme Edwards took on the role of Lifetime Group director and chairman and David Haintz was appointed as an independent chairman of Lifetime Group Holdings and its subsidiaries.

• Craig Wagstaff joined New Zealand Home Loans (NZHL) as its new general manager for franchise, distribution, and marketing.

• The Adviser Platform (TAP) appointed Pooja Shetty as Senior Operations Specialist and Naz Mistry as a Compliance Specialist and Adviser Support.

• Some big names in the industry have retired, with David Haak, Tony Arthur, and our very own Rob Dowler retiring

Here’s to another exciting year in 2024!

2023 at Quality Product Research Limited

As always, we’ve had the chance to investigate some topical themes in our quarterly reports, highlights this year being: a discussion on using AI in financial advice, particularly ChatGPT and its challenges, limitations and factual errors; an analysis identifying how many financial advisers are connected to each financial advice provider and another on how many financial advice providers and financial advisers there are; just how much an adviser tech stack can cost; and exploration of causes for lapses in the NZ insurance market.

We haven’t been resting on our laurels here, with loads of product enhancements delivered this year including our shiny new website and branding. Quotemonster have made a series of upgrades including completing our two-factor authentication (2FA) process, adding a Remote Assistance function, improved the Advicemonster Quote Wizard, added a beta Upload Insurance Quote function that will automatically input in your Quotemonster Client and Benefit Details, established the Quotemonster Advisory Board, held a Nationwide Quotemonster roadshow across 15 towns (and online too!) with over 1100 people registering to attend (see some pics below), made legacy research live on Quotemonster and added business insurance to Advicemonster. Phew!

We’ve welcomed Kim Oliver and Aneel Ravji to the QPR team. Kim is our new Research and Customer Service superstar and helps keep the research database up to date and supports advisers with their queries. Aneel is our AdviceTech lead and his role is assisting advisers with their advice process – if you have any questions about what Advice Monster can do for you and your business, contact Aneel today.

We’ve loved exploring wider industry news on the blog, with some favourites this year being AI’s disruptive influence on the global economy; opportunities for advisers and how Australia’s Federal Government is seeking feedback on the use of genetic test results by insurers.

We want to say a huge thank you from the Chatswood and QPR teams. We have thoroughly enjoyed working with you over the past year and look forward to another exciting year in 2024. A reminder that our office will be closed from the 22 December 2023 – 8 January 2024.

We hope you all have a wonderful break, and we look forward to working with you in 2023.

Best wishes, from all the team at Chatswood and Quality Product Research.

Partners Life announces new CEO

Partners Life has announced that Michael Weston will be appointed CEO following Naomi Ballantyne’s departure. Weston is currently working as Head of Transformation and Strategy for Manulife Asia. Weston will start the new role on 4 March next year, leaving time for a handover from Ballantyne before she retires from Partners Life on 31 March.

Partners Life Board Chair, Jim Minto says

“Michael’s extensive background in Financial Services Operational, Transformational, and Strategy roles, coupled with his in-depth knowledge of multiple international markets makes him an ideal candidate to continue Partners Life’s journey of using intelligent innovation and excellent execution to deliver outstanding customer and stakeholder value.”

More daily news:

Asteron Life sees more than 150% growth in employee insurance schemes over a five-year period

GDP decreases 0.3% in the September 2023 Quarter

Financial advisers’ mental health and wellbeing has improved, though still worse than the average NZ worker

AIA NZ has released a report looking into financial advisers’ health and wellbeing, following on from the research they sponsored in 2021. While overall wellbeing showed signs of improvement, stress was still a concerning factor. In 2021, government regulation was the highest cause of stress for advisers (61%); this year’s highest stressor was compliance, with 50% of respondents rating it as ‘highly’ or ‘very highly’ stressful. In both years, work overload was the second most stressful issue (at 42.2% in 2021 and 36.7% in 2023).

The number of advisers who have said they will continue in the industry has increased significantly, up to 93% from 84% in 2021. Work life balance has improved, with 37.2% of those surveyed working 35 to 40 hours per week and 8% less working over 50 hours per week compared to 2021.

The report includes a breakdown of where advisers spend their time, showing the wide variety of tasks that make up an adviser’s job. Only 12.23% of their time is spent on actually providing advice.

Recommendations for improving wellbeing and mental health include: seek help from industry support services; be an active member in networks; engage in recovery activities like exercise, meditation, hobbies, social activities; seek admin help to free up time to focus on client work; use systems that automate processes; get support from counsellors or psychologists when experiencing mental stress; minimise crossovers between work and home; and focus on the business.

Sharron Botica, AIA NZ Chief Partnership Distribution Officer, says

“…it’s encouraging to see signs of improvement across the board, however, the impact that stress is having on adviser health and wellbeing is a concerning factor which needs to be addressed,”

“We believe our role as leaders in the industry is to ensure our advisers have the tools and support to be mentally healthy, focus on their wellbeing, and have the opportunity to thrive and do what they do best every day.”

The research was conducted by Dr Adam Fraser, founder of The e-lab, and Dr John Molineux from Deakin University and participants included life and health insurance advisers, business owners, home loan advisers, investment advisers, risk advisers, sole trader advisers, and general advisers, aged 18 to over 60, who were either qualified, partly-qualified, or unqualified.

More daily news:

Southern Cross Health Insurance appoints Regan Savage to the role of chief sales and marketing officer

Financial Advice NZ webinar 'Super Wednesday' 7 February

NZIER predicts general slowdown for NZ economy

Bell Gully give overview of RBNZ’s proposed policy recommendations for amendments to IPSA

Boutique investment managers want FMA compliance expectations scaled back

Legal and regulatory update for the life and health insurance sector

11 Dec 2023 - The Reserve Bank of New Zealand publish an Analytical Note, looking at how New Zealand households’ inflation expectations respond to changing prices - what inflation is now and how that shapes what people think it will be in future. The Note found that household inflation expectations are more sensitive to inflation when it goes above 2 to 2.5 percent.  https://www.rbnz.govt.nz/hub/news/2023/12/households-tend-to-pay-more-attention-to-inflation-when-it-is-high

12 Dec 2023 - The Reserve Bank of New Zealand have published the annual updated weights for the Trade Weighted Index  https://www.rbnz.govt.nz/hub/news/2023/12/updated-weights-for-trade-weighted-index

12 Dec 2023 - APRA  has released updated requirements for banks to better manage the impact of interest rate changes on their financial position. In a response to its November 2022 consultation released today, APRA has updated its revisions to Prudential Standard APS 117 Interest Rate Risk in the Banking book (IRRBB) aimed at:

• reducing some of the volatility in the IRRBB capital charge;

•  creating better incentives for banks to manage their IRRBB risk, including raising standards of governance and measurement of risk; and

•  simplifying and removing complexities in the IRRBB framework.

https://www.apra.gov.au/news-and-publications/apra-moves-to-reinforce-requirements-for-banks-to-manage-interest-rate-risk

13 Dec 2023 - Reserve Bank of New Zealand (Economic Objective) Amendment Bill  has gone to Committee of Whole House https://bills.parliament.nz/v/6/c2a1d856-adc2-4b6a-19e5-08dbfadead1f?Tab=history

Asteron Life sees uptick in lapse rates

Asteron Life’s executive general manager Grant Willis spoke to Good Returns about increasing lapse rates, levels offerings and changing adviser profiles.

Anecdotally, advisers are starting to see more household budgets under financial pressure. Willis said Asteron Life is seeing more cancellations and alterations to policies to reduce premiums and/or scale the sum insured back, despite having one of the best lapse rates in the industry. Willis highlights the importance of product flexibility during times such as these, with Asteron Life customers being able to pick different levels of cover, level of yearly renewable term and even the availability of inbuilt premium holidays that customers can take under specific pressure.

Willis talks about how he’s seeing a lot of new advisers coming though, younger people and perhaps people in second careers, plus children following their parents into financial advice.

More daily news:

David Haak is leaving Chubb

FMA release the results of its annual Ease of Doing Business survey

Lifetime webinar 'Invest In Your Tomorrow: Enhance Your Financial Wellbeing' Dec 14

Gallagher Insurance is a new sponsor of the 103rd New Zealand Open

Foundation Advice Ltd owes around $8 million

Graeme Lindsay talks about the best health insurance to have

The FMA had an almost $6 million surplus for the 12 months to June 30

Research and website upgrades: what you need to know

QPR Database V15.6 has been released! 

Our Research team have made some monstrously good updates to the QPR database recently. If you’ve noticed we’re running a bit slower than usual, please refresh your page and scroll down to ensure that you’re on our latest version – QUOTE ENGINE V.3.0 B1 | QPR V.15.6 | WEB V4.5.5

Our latest updates to Researchmonster include:

- Partners Life - new policy document for personal and business V19 effective 06/10/2023

- AIA - new policy document for AIA Living Personal/Business Life and Trauma effective 10/10/2023

o   rating changes applied to:

·         Life: ‘Grief & Funeral Support’

·         Trauma: ‘Child Trama’ age, ‘HIV’, and ‘Advanced AIDS’

- ASB - new policy documents and rating changes applied to:

o   IP/MP Lifestyle Security effective 31/07/2023

o   Life and Trauma effective 10/10/2023

- Fidelity Life - enhancements effective 23/11/2023 and rating changes applied to:

o   Life, Life Income, TPD, Trauma: ‘Special events’

o   Life: ‘Grief & Funeral Support’ (reflects the introduction of the new Repatriation Benefit)

- MAS - new policy documents and rating changes applied to: 

o   Professional Life Plan effective 01/06/2023

·         Life: ‘Grief & Funeral Support’

·         TPD: ‘Counselling & Support Benefits’

·         Trauma: ‘Child Trauma’, ‘Grief & Support Benefits’, ‘Upgrade Policy Wording’

o   Income Security effective 28/08/2023

·         Income Protection: ‘Dependent Leave Without Pay’, ‘Death Benefit’

- Unimed - new policy document effective 01/08/2023 and rating changes applied to:

·         Minor Surgery

·         Physiotherapy

- Reviews:

o   Life: ‘Exclusions’

o   Mortgage Protection: ‘Offsets’

o   Trauma: ‘Cardiac Arrest’, ‘Future Insurability’, ‘Angioplasty’, ‘Diagnosis and Partial Benefits’

o   Medical: ‘Overseas Treatment’, ‘Surgical Benefit’, ‘Mental Health Support, ‘GP Minor Surgery’, ‘Imaging’ 

Standalone Head to Head is a powerful tool subscribers can use to:

-          Compare legacy products for replacement business – a list of the products available in this feature can be found here

-          Compare products from the same provider; e.g., AIA Critical Conditions vs Progressive Care

-          Compare different product sets; e.g., Severe Trauma vs Comprehensive Trauma

-          Quick head to head research comparisons

Please note this feature is still in Beta version so please reach out to us if you have any feedback that you would like us to consider in our next round of development.

Our Health Benefit Maximums report available to Researchmonster and Advicemonster users, has also been updated to align with the updates in our research database. This quick reference guide aims to help advisers quickly identify some of the important differences when it comes to health cover benefit maximums. It doesn't include every individual niche benefit that some insurers offer, and some benefits can only be claimed on under specific circumstances (e.g., within 12 months of surgery).

If you have any questions regarding these please feel free to email us on info@quotemonster.co.nz 

Happy Crunching!