New medical price comparison database update

We have just uploaded a new version of the Medical Comparison database to all subscribers through your various file-sharing mechanisms. This is version 10_5 of the health or medical insurance price comparison, reflecting the following changes.  

Changes in V105:

• Updated nib rates effective 1/1/24

Updated AIA policy fee effective 1/1/24

Swiss Re write about Health and Wellness engagement impacts

Swiss Re have published a report on how to engage customers with a health and wellness programme. They write how the proliferation of health apps and wearables has led to consumers having more data about their health and lifestyle than ever before. Two thirds of consumers are open to sharing personal data or health results in return for a benefit, whether that’s personalised health advice, discounts or something else.

For insurers there are many benefits, from increasing the frequency of touchpoints, building customer loyalty and maximising lifetime customer value. For consumers the benefits include more relevant products, better price points, meaningful financial incentives and rewards and, best of all, improved health and longevity.

Swiss Re calculated that a successful program with a 25% engagement rate can be ROI positive, after accounting for the costs of launching and running the health and wellness engagement programme including policyholder rewards, premium reductions, initial setup costs and ongoing costs. If engagement rises to 40%, profitability can be up to 9% higher compared to not having a programme in place.

John Hancock in the USA is hiring behavioural scientists and drawing on gamification elements to help encourage policyholders to lead healthier lives. For example, when customers hit an activity threshold they can spin a wheel to win rewards.

Insurance Thought Leadership discuss the success of the Vitality programme. Vitality aims to increase people’s healthspan, the time in a person’s life where they experience optimal health, through a behaviour change incentive programme. Policyholders are nudged towards healthier lifestyle choices that they’re rewarded for in various ways including discounted premiums, discounts at places like gyms and free health checks. They list benefits of the programme to the insurer including reduced frequency and severity of claims, high engagement of policyholders and high levels of retention. Over the last three decades,

“Discovery's three-decade journey provides robust evidence that a significant increase in the level of physical activity reduces by 49% the mortality for individuals aged 45 to 65, and a remarkable 61% reduction for those older.  Positive impacts have further manifested within annual medical expenditures, where the most engaged participants have 15% lower claim costs than the less engaged, risk-adjusted by age and medical conditions. A longitudinal study on the people who showed a low level of physical activity during the initial six-month period showed a subsequent 14% reduction in hospital medical costs for the subgroup that notably elevated their engagement levels over the ensuing four and a half years.”

AIA NZ have recently released statistics on how AIA Vitality has contributed to notable shifts in health metrics. By September 2023 there was a 20% increase in members moving from an unhealthy body mass index (BMI) range to a healthier one. Similarly, there was a 51% improvement in blood pressure levels, 26% in cholesterol levels, and 81% in glucose levels.

Which is more important? Insuring your car or your life?

Pinnacle Life has a cool blog post which compares the cost of insuring a second hand car, with that of buying life cover. At the same time they pack in a few good points about what affects costs, what add-ons are available, and so on. It’s always good to remember that life insurance is a very cost effective way to get financial protection for the worst that can happen in life. Check it out at this link: Pinnacle Life compare the cost of life insurance to car insurance

Financial Advice New Zealand appoints new CEO

The Board of Financial Advice New Zealand has announced the appointment of Nick Hakes as Chief Executive Officer of Financial Advice New Zealand. From the release by the board:

“Nick relocates from Singapore, where he has been the Director of Market Development Asia at Kaplan Professional. Prior to this, Nick was General Manager, Member Services, Partnerships and Campus AFA at the Financial Advice Association Australia (AFA) in Sydney. 

Nick has held Director and Chair positions on the Board of Pro Bono Financial Advice Network, an industry-wide collaboration that connects financial advisers willing to provide pro bono financial advice with people facing personal health crisis. Nick has also served as the Vice Chair on the International Certification & Standards Board, a standing committee of the Asia Pacific Financial Services Association (APFinSA) that governs the professional certifications and education pathways of its professional adviser designations throughout the region.

I am sure you will all join me in welcoming Nick Hakes to our membership organisation. We are all looking forward to working with Nick and excited about the experience and energy he brings to the organisation. Nick understands the value of the collective voice of financial advisers and brings a wealth of international experience and expertise within the wealth management and financial advice industry, with an extensive background in building strategic partnerships, adviser-focused professional development frameworks, and membership growth for professional adviser bodies.

Nick will commence the role on Monday 26 February 2024. You will have the opportunity to meet Nick at the THRIVE Conference 2024.

Three of the Quotemonster team will be at the Financial Advice New Zealand annual conference, If you haven't booked, do get along, we would like to see you there. The conference is held in Wellington this year on 5 & 6 March. You can find more details about the conference here.

AI and Machine Learning are driving benefits and reducing headcount in the insurance sector

A survey of insurers by Rackspace has found that the implementation of Artificial Intelligence (AI) and machine learning (ML) technologies are driving benefits and enabling the reduction of headcounts.

The survey found over the past 12 months 62% of insurers had cut staff numbers due to the implementation of AI and ML. They found that the new technology enabled low-level analyst work to be completed by AI and ML. 52% of respondents said they had already realised substantial benefits from AI/ML, with a further 23% seeing modest benefits. 25% of respondents said it was too early to tell.

The benefits insurers listed from implementing AI/ML were

• 81% risk reduction, increased understanding of business/customers

• 79% increased sales

• 77% personalised marketing

• 75% increased productivity

• 73% increased revenue streams, operation cost reduction

• 69% improved customer satisfaction

• 67% faster time to profitability, reduced cost of new product development, ability to hire/recruit new talent

• 65% increased innovation

There are still some issues with AI, with 42% only ‘slightly trusting’ AI/ML results compared to 28% ‘strongly trusting’ results.

Talent and skill shortages were seen by 67% as the greatest challenge to further adoption of the technology; however 90% of insurers had grown their AI and ML workforce in the past 12 months.

Although this survey lumps AI and ML together there are some fundamental differences. Machine learning can be disconnected from the large volumes of training data that are used in generative AI such as Chat GPT. Although that may sound like a disadvantage, narrower pools of training data can make results from machine learning applications much more accurate for highly specific tasks. It also means that data does not have to be shared with generative AI engines – its can remain in confidential silos within the business.

ChatGPT recently put forward it’s arguments for how it can positively impact the insurance industry. While there are still plenty of cons to using ChatGPT right now, ranging from inbuilt biases and prejudices to its failure to comprehend nuance such as sarcasm, some insurance executives believe the underlying technology could be used as a starting point to build on and to jumpstart innovations in the sector.

At Quality Product Research Limited we agree that there are some great opportunities for implementation of AI and ML initiatives. With more than 15 million quotes and over 1.25million data points of data in our research databases we are well positioned to employ these tools to greater effect over the coming years.

Quality Product Research: Southern Research Advisory Board

In the last quarter of the year, we had our Research Advisory Board meeting with our Southern Representatives. We came away with tons of valuable feedback to implement in our research ratings on Quotemonster.

Independent Chair: Tony Dench

Southern Research Advisory Board members: Travis Hamilton, Jeremy Bernstein, and Wilhelmina Eveleens

Insurer Observers: Karl Sievwright (Southern Cross), Emma Wise (AIA)

QPR Representatives: Russell Hutchinson, Aneel Ravji and Doreen Dutt

The research advisory board reviewed the following topics:

·         The proposed rating changes for the non-surgical benefit. An important subject, this discussion resulted in adjustments following the Southern Cross changes to their contract and our reweighting the feature, and others to reflect the change in claims profile for this benefit.   

·         Revised Income and Mortgage Protection Claims Model, this resulted in a range of scenarios and details that will be included in our newest claims model.

·         A handful of research reviews we have accumulated based on adviser feedback, such as, the additional of Cerebral Aneurysm, optional items included in our extras or premier Income and Mortgage Protection options, and sharing on which products should be prioritised in our legacy research.

The feedback from our Research Advisory Board meetings has overall been very valuable to our Research team and allows us to strengthen our research ratings when we gain an insight into the adviser perspective.

We look forward to our meetings in 2024!

For more information on our Research Advisory board please click here.

Demystifying Advicemonster [online training session]

Our first Advicemonster training session for 2024 has been scheduled!

Take your Statement of Advice (SOA) to the next level and join us on Wednesday, 17 January 2024 11:30 am-12:30 pm

In this session, we have an in-depth walk-through of our Statement of Advice service and how you can create a professional and comprehensive SOA. Be the first to learn about our recent enhancements and ongoing developments from our new AdviceTech Lead, Aneel Ravji. Our Needs analysis and SOA tools are exclusive to the Advicemonster subscription and due to the advanced nature of the product, training can take between 60-90 minutes. This session is great to attend for those considering upgrading their subscription, or if you have already upgraded but would like to learn how to get the most out of it.

If you would like to register, please send us an email on aneel.ravji@qpresearch.co.nz

We look forward to seeing you there! 

FSC produce a Retirement Planning Guide

The Financial Services Council (FSC) have produced a Retirement Planning Guide which introduces people to some key retirement planning considerations.

The guide has a retirement planning overview, a ‘how to’ guide for Sorted tools and explains how to use the NZ Society of Actuaries’ rules of thumb.

The key considerations in retirement planning are how much you should save for retirement and what you can reasonably spend in retirement. The guide gives examples of matters within your control and variables outside your control which will impact on both of these considerations.

The Sorted tools that are particularly relevant are the KiwiSaver calculator and the Retirement calculator and the guide gives some tips on how to adjust these to reflect your situation.

The guide also explains the different rules of thumb developed by The New Zealand Society of Actuaries: 6% rule, inflated 4% rule, fixed date rule and life expectancy rule.

We think that the most valuable step you can take towards securing a good retirement is to get some advice. Although the DIY tools suggested in this guide can be useful in getting you thinking, this is a complex area in which an adviser adds real value. We suggest talking to a financial adviser with the right skills, experience and qualifications to help you set up a plan, monitor it and revise the plan when circumstances change.

Quotemonster Online Training (with tips and tricks)

Our first introduction to Quotemonster training session for 2024 has been scheduled!

Get a head start on the year and join us on Tuesday, 16 January 2024 11:00 am-12:00 pm.

In this session, hosted by Kelly, our National Partnerships Lead, we go over the basics of using Quotemonster and how to make the most of your Researchmonster subscription along with:

• How to generate a premium comparison between insurers

• How to set up your Product and Provider Settings screen 

• How to directly compare two insurers for replacement business (Head-to-Head) 

• How to download our detailed comparison and client-friendly benefit overview or heat map report

• How to add banks and non-adviser companies to your Research comparison

• How to find legacy policy documents

If you would like to register for this session please send us an email on info@quotemonster.co.nz

We look forward to seeing you there!

What do you want us to write about?

We’d love to find out what you’d like to read more of this year on the blog. Local industry news? Global insurance news? Health news? Insurtech? Let us know here.

Our top read stories since we switched to the new look Chatswood website were Swiss Re’s take on sustainability in life and health insurance, Fidelity Life’s product enhancements and Accuro and Unimed's announcement of their proposal to combine.