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.
FSC CEO resigns
Richard Klipin has announced his resignation as CEO of the Financial Services Council of NZ (FSC).
Richard Klipin has announced his resignation as CEO of the Financial Services Council of NZ (FSC).
Klipin has led the FSC for the past seven years and he will remain in the role whilst the Board starts the search process to find a replacement.
Rob Flannagan, Chair of the FSC, says
“Under Richard’s leadership over the past seven years we’ve developed from a small organisation of 29 members to one that is now has 119, and living its purpose as the clear voice of the financial services sector and growing the financial confidence and wellbeing of New Zealanders.
Richard has led this renewal in vision, strategy and purpose; and his strength as a community builder is evidenced by the active involvement of over 540 members across the many FSC Commitees, forums and working groups.
Richard is leaving the FSC in great shape, with a new strategic plan and a ‘Blueprint for Growth’ policy platform that unites the sector, and has support and backing from government and regulators.”
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Nick Hakes reflects on the financial advice industry in Asia-Pacific
FSC webinar 'Will big data & AI change everything?' 27 February
The IFSO Scheme will partner with Banqer
FSC's CEO Richard Klipin to speak at FinTechNZ's Hui Taumata
The Reserve Bank is in the early stages of planning for the next five-year funding agreement
KiwiSaver providers sceptical potential changes KiwiSaver scheme will benefit members
Southern Cross Healthcare appoints Dr Erica Whineray Kelly as Chief Medical Officer
Te Ara Ahunga Ora Retirement Commission says political parties need to reach cross-party agreement
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.
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.
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.
FSC’s latest Money & You research finds a perception gap between financial confidence and financial literacy
The Financial Services Council (FSC) have released their latest Money & You research findings. The research found a ‘perception gap’, with 82% of people feeling financially confident yet only 62% of people showing a real understanding of the four financial concepts tested.
The Financial Services Council (FSC) have released their latest Money & You research findings.
The research found a ‘perception gap’, with 82% of people feeling financially confident yet only 62% of people showing a real understanding of the four financial concepts tested.
Worryingly, the research found that 56% of New Zealanders aged 18 or older aren’t financially prepared for retirement, with that figure shooting up to 69% of women not feeling prepared for retirement. We are really keen to see this broken down by age group in future as we would expect most young people to feel the least prepared, and some of the group just pre-retirement to feature more of the better prepared. The fact that the figure rises sharply for women is probably a good reflection of the larger retirement gap that women face due to longer lives combined with, often, a gender pay gap, and also often, career disruption due to having children, which tends to make preparing for that retirement more difficult.
Of those in KiwiSaver, 42% are only contributing the minimum 3%, and 64% of employers are contributing the minimum 3% – leaving a vast gap between projected KiwiSaver funds at retirement and what’s needed for a ‘no frills’ retirement. It is hoped that other preparations are being made - such as paying off a home and investing in other ways. In practice we know that with a very high cost housing fewer will have paid off homes and that will also reduce the scope for non-KiwiSaver savings and investments for many.
The current cost of living is impacting people’s insurance buying behaviour. When it came to life insurance, the report found that expense was the highest reason for not purchasing insurance (63%) and 57% of respondents said they would take out an insurance policy if they had more money. 55% of people who had previously had health insurance have said that the cost of living is so high they can no longer afford it.
More daily news:
MAS are recruiting for a Healthy Practice Adviser in Wellington
Tony Dench calls on the government to give considered and deliberate engagement with the sector
Bruce Patten says he's seeing more people cancelling insurances
Fidelity Life updates
Fidelity Life have been busy.
They have launched a live chat function for advisers to be able to interact with new business and underwriting teams.
Fidelity Life will launch product enhancements in November including
increasing maximum monthly benefit percentages from 110% to 115% of mortgage repayments;
new trigger to increase cover as a result of buying an investment property, holiday home, residential block of land, or co-signing a child’s mortgage;
new trigger for when financially supporting a child through first course of full-time tertiary education;
special events - removing the exclusion for customers with loading >100%
future events & insurability - removing the exclusion for customers with non-standard terms;
increasing the maximum monthly benefit for Key person new to business from $4,000 to $6,500 and for Key person for farmers from $5,000 to $9,000;
rolling out new repatriation benefit to all inforce and new on-sale life covers (except Survivor’s income cover), which reimburses up to the lesser of either 10% of the life cover sum insured or $20,000, helping to cover the cost of repatriating a body home;
changing our Trauma Stand-down start date to when the customer submits their completed application instead of when they finish underwriting.
In coming months Fidelity Life will publish turnaround times for new business and call centre interactions.
Fidelity Life are offering special relief to weather impacted customers in Queenstown, Gore and Southland who are facing financial hardship. They have offered a waiver of premiums for up to 3 months while keeping cover in place.
Fidelity Life will roll out annual product re-accreditation training models in November, mandatory for all advisers working with Fidelity Life customers
Fidelity Life have published a ‘Working together guide’
More daily news:
Russell Hutchinson talks about how advisers can help their clients in tough financial times
Jenny Ruth criticises Southern Cross for pulling out of planned interview
Mark Banicevich, Industry Engagement Manager at Partners Life, provides views on governance
Policyholders to vote on Accuro and Unimed merger at special meetings
Financial Advice NZ webinar 'How to best advise and manage forestry assets' 15 November
Cyber Smart Week runs from 30 October – 5 November
FinTechNZ Roundtable – Competition for Personal Banking Services on 27 November
AI and its disruptive influence on the global economy
Capital Economics has an interesting discussion on how Artificial Intelligence (AI) will transform the global economy, fundamentally changing how companies and economies operate. They show how technology adaption lags have been decreasing worldwide, with countries becoming ever faster to implement a new technology after it is invented. They also theorise that faster adopters generally reap larger productivity gains.
They posit that one of the biggest productivity boosts from using AI will come via one-off efficiency savings – doing more with existing resources or doing the same with fewer resources. In some cases, AI will replace human activity where it’s more efficient; other times AI will enable people to become more productive in their existing jobs. In other situations AI will be able to aid innovation, sifting through information to identify relationships and patterns that people might overlook.
Capital Economics have developed an AI Economic Impact Index, which assesses which economies are best placed to benefit from AI over the next couple of decades. Unsurprisingly, they rate the United States as best placed, due to their existing technological leadership, the size of their economy, level of public and private R&D spend and high levels of education.
Capital Economics suggest industries with repetitive tasks suitable for automation will adopt AI quickly. They also suggest industries with large datasets may be able to quickly initiate AI adoption for laborious tasks. Industries involving a lot of manual labour which cannot be automated and industries at greatest risk from adopting AI will be slower to implement its use. They stress that eventually AI’s influence will spread to affect all sectors of the economy.
A close-to-home example of how AI can help improve productivity is how Quotemonster is helping advisers become more efficient with opt-in AI functionality. Advicemonster users can use the ‘upload insurance quote’ function to save a pdf version of your insurer quote into the portal and the AI will automatically input in your Quotemonster Client and Benefit Details, speeding up the process substantially.
If you’re interested in finding out more about AI in regards to the financial services sector, a recent Chatswood Consulting Limited Quarterly Life and Health Sector Report has more information, including a discussion on the current challenges and limitations. Reach out to Kelly Pulham on 021 311 660 or kelly.pulham@chatswood.co.nz to find out more.
More daily news:
FSC finds Health Insurance Sector issued $1.8 billion in claims in the 12 months to 1 July 2023
Nominations for the Financial Advice New Zealand Awards 2024 open
MinterEllisonRuddWatts discuss Australia’s proposed regulatory framework for digital asset platforms
Household living costs up 7.4% in the last year
Nurses warn dire staffing shortages in ED are putting workers and patients in danger
PWC summarise changes outlined by the CoFI regime
PWC have produced a useful summary of the key changes outlined by Financial Markets (Conduct of Financial Institutions) Amendment Act (CoFI), which was passed on 29 June 2022. License applications opened in July this year and CoFI will come into force in March 2025. The Ministry of Business, Innovation and Employment (MBIE) is working on regulations to support the CoFI regime, which are expected to be released later this year.
In short, the key aspects of the CoFI regime are:
· Promoting good conduct and culture.
· Complying with a set of duties and obligations that help protect customers and promote good conduct.
· Financial institutions need to be licensed by the Financial Markets Authority (FMA) to operate in New Zealand.
· The FMA has increase supervisory and enforcement powers.
· A focus on delivering good outcomes for customers.
Penalties for breaches of CoFI’s regulatory requirements include:
· The FMA taking enforcement action which could include imposing fines, giving directs to take corrective action or taking the institution in breach to court.
· Maximum penalties of $5 million for companies and $500,000 for individuals.
· The FMA could order compensation for customers.
· The FMA could suspend or cancel the licence of a financial institution.
· Reputational damage.
PWC set out a helpful guide of activities you can do now and in future to prepare for COFI. The FMA has information on Fair Conduct Programmes and more detailed information on CoFI, including how to apply for a financial institution licence here.
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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.
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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
Fidelity Life offer financial assistance for flood-hit customers
Fidelity Life are offering financial assistance for flood-hit customers in Queenstown, Gore and Southland. Customers facing financial hardship as a direct result of the flooding can apply to have their premiums temporarily waived for three months, with the potential to extend for a further three months, without it affecting their insurance protection. This is the same relief they have used for customers affected by other natural disasters including flooding in Tairāwhiti/Gisborne earlier this year and in the South Island last year.
Fidelity Life remind everyone of the importance of maintaining insurance cover even during times of financial difficulty, with Chief Customer Officer Peter Doherty saying
“This premium relief offer is one way we can show our support to our South Island customers, and we encourage anyone who’s facing hardship as a result of this extreme weather to contact their adviser to see how we can help. We know many New Zealanders are doing it tough right now and events such as this only make the situation worse.”
More daily news:
Tony Vidler writes of how benchmarking groups can help advisers see how they're doing
AIA New Zealand has appointed Michele Embling as an independent non-executive board member
ANZ has partnered with Age Concern New Zealand on scam protection
Paul Gregory from the FMA talks about how to avoid greenwashing
Healthcare Leadership Symposium is on 25 October
Centrix data shows there were 28% more mortgages behind on payments in August than a year earlier
PWC publish New Zealand Workforce Hopes & Fears Survey 2023
PWC have published their New Zealand Workforce Hopes and Fears Survey 2023, exploring views on business viability, worker sentiment, workforce skills, emerging technology, work environment and climate action. 1,000 respondents shared their views and in general, kiwis were more optimistic than others Asia Pacific countries, with 72% believing that their employer will still be in business in the next decade.
New Zealanders were consistent with the rest of Asia Pacific in terms of 57% of both areas being very or moderately satisfied with their jobs, however kiwis were less likely to ask for a pay rise (37% vs 43%), ask for a promotion (23% vs 38%) or change employer (20% vs 28%).
Only 25% of kiwis believed the skills for their job would change significantly in the next 5 years (versus 44% of those in the Asia Pacific region). In terms of technology, kiwis seem to think AI will be less disruptive and provide less opportunities than Asia Pacific respondents: 35% don’t think AI will impact their jobs, much higher than Asia Pacific as a whole at 16%; 22% believe AI will help them increase their productivity/efficiency at work (vs Asia Pacific 41%); only 18% think AI will create opportunities for them to learn valuable new skills (vs Asia Pacific 34%); only 12% believe AI will create new job opportunities for them (vs Asia Pacific 25%); and 44% think that digital skills are important to their career (vs. Asia Pacific 59%).
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Southern Cross are reviewing the way they communicate changes
Early bird tickets for FSC’s Trans Tasman Strategic Leaders Summit on 4 - 6 March 2024 available now
mySolutions webinar - Richard Sewak shares his adviser story, 4 October, 9am
NZIER Consensus Forecasts predict subdued economic growth over the next two years
ASB awarded Digital Banking, Bank of the Year by Canstar NZ
Study finds having a healthy lifestyle reduces risk of depression by 57 per cent