All the claims data is shouting a message we do not want to hear

Two claims data releases by (AIA and Partners Life) shout out strongly the large causes of claims: these are driven mainly by non-communicable disorders. That’s cancer, respiratory illness, heart disease, diabetes, and mental health problems. Although many claims, especially in income protection, are initially caused by accidents - they are still a minority. Although many claims causes are much more widely reported - murder, suicide, motor vehicle accidents, terrorism - it is the non-communicable diseases that steal decades of life from our family and friends. Although it is understandable, perhaps, to believe that sudden external and violent means of death are more preventable, the truth is the reverse. In terms of personal agency, the extent to which choices you make can influence the outcome, people have more power to reduce risks by working on the causes of these big non-communicable disorders than almost any other health intervention. It’s also relatively low cost to make these changes. It is not easy, but good things rarely are.

AIA published back in 2021 the excellent “5590+” report which highlights how five ‘modifiable behavioural factors’ lead to five non-communicable diseases, that account for 90%+ of the deaths in New Zealand. It is worth a read: 5590+, the numbers that will help you lead a healthier, longer, better life (aia.co.nz)

That this is not an easy read is clear. Most people do not want to be told that diet and exercise are the answers. They would rather a pill or procedure. It is also important to acknowledge how hard it is to move against trends that are in the majority in society. In the 1970s it was possible to eat the way most people do today, but it was difficult, so most people were slimmer. The reverse is now true. That the odds are stacked against you is unarguable: modern processed food, takeaways, and restaurant meals are almost designed to work against you. It is hard to force yourself to eat well, and easy to eat badly.

That much of the media are happy to highlight the scary, and very rare, makes it hard to turn towards the daily and the commonplace with fresh eyes and face them down. Some social media scaremongers are trying to worry you about sideshows, it remains necessary to stay focused. That means improving what we do every day in terms of food, drink, movement, and attention. It is not just you it is also a challenge to me. Weighing in at 1.5 kilos more than I was on Jan 1st, I have to keep my eyes on the prize and get back to smaller portions, more greens, getting out into nature, and pushing a bit more tin at the gym.

AIA celebrate 5 years of AIA Vitality

AIA have released some statistics about AIA Vitality to celebrate five years of AIA Vitality being in the market.

• To date, over 60,000 people have joined AIA Vitality.

• On average, an AIA Vitality member in New Zealand completes a health and wellbeing assessment available in the app every 15 minutes.

• AIA Vitality members have completed over 18,500 free Vitality Health Checks.

• Since becoming AIA Vitality members:

  • 79% have moved to a healthy glucose range from an unhealthy glucose range.

  • 64% have moved to a healthy cholesterol level from an unhealthy level.

  • 49% have moved to a healthy blood pressure range from an unhealthy range.

• Less than 50% of New Zealanders meet the recommended guidelines of 2.5 hours of weekly physical activity but 95% of AIA Vitality Silver+ members meet this target.

• AIA Vitality members combined have walked the length of New Zealand 1,295 times.

• Members have achieved over 86,800 Status Reward vouchers and 976,500 Active Rewards vouchers – a combined worth of $9.1 million in rewards.

To celebrate the anniversary, AIA is giving customers who activate their AIA Vitality membership by 31 October the chance to win one of 20 Woolworths Gift Cards, each worth $500. Existing AIA Vitality members who hit their $5 weekly physical activity target anytime between 5 August and 1 September, go in the draw to win 1 of 5 Apple Store Gift Cards worth $729.

AIA have recently made some improvements to AIA Vitality, with a new AIA Vitality app with enhanced features and functionality being launched in April this year.

More news:

AIA offer clients a chance to win a year's insurance

The FSC runs a Money Month campaign on Money and You website

Partners Life and Banqer launch free financial literacy course

AIA appoint Bianca Bettini as new AIA Vitality Coach

Andrew Bayly says the CCCFA’s director and senior management liability provisions to stay

Westpac connect Volley to their Open Banking platform

Bell Gully put together an overview of the Customer Data Right bill and the CDR framework

Finance Minister says she wants external investors for outside capital for Kiwibank

GP’s having to raise fees after insufficient government funding increase

Legal and regulatory update for the life and health insurance sector

30 Jul 2024 - NZ Police Financial Intelligence Unit release “The CASH Report” for July 2024, which replaces "The Suspicious Activity Report”.  https://www.police.govt.nz/sites/default/files/publications/fiu-monthly-report-jul2024.pdf

31 Jul 2024 - The Reserve Bank of New Zealand has published two new Analytical Notes that investigate utilising new models and data sources to complement existing approaches to monitoring financial stability.
The first Analytical Note - Getting sentimental: Using news sentiment to measure financial stress in New Zealand, investigates using measures of news sentiment as early-warning indicators of financial stress in New Zealand. This Note introduces new indicators which measure economic news sentiment in New Zealand.
The second Analytical Note -Beyond the crystal ball: forecasting non-performing loans authored, investigates the relationship between non-performing loans and economic conditions to provide insights into the future health of New Zealand’s financial system. https://www.rbnz.govt.nz/hub/news/2024/07/reserve-bank-of-new-zealand-explores-new-techniques-to-enhance-financial-stability-monitoring

7 Aug 2024 - The FMA have released a public scam warning alerting New Zealanders to an increase in fake advertisements using images and deepfake videos of political figures.  https://www.fma.govt.nz/library/articles/deepfake-video-scam-warning-fake-news-stories-political-endorsements/

7 Aug 2024 - ASIC proposes to extend the operation of three legislative instruments for a further five years:

• Class Order [CO 14/923] Record-keeping obligations for Australian financial services licensees when giving personal advice,

• ASIC Corporations and Credit (Breach Reporting—Reportable Situations) Instrument 2021/716, and

• ASIC Credit (Breach Reporting—Prescribed Commonwealth Legislation) Instrument 2021/801.

ASIC has assessed that these instruments, which are due to expire in October 2024, are operating efficiently and effectively, and continue to form a necessary and useful part of the legislative framework.

https://asic.gov.au/about-asic/news-centre/news-items/asic-proposes-to-extend-the-operation-of-three-legislative-instruments/

7 Aug 2024 - The Council of Financial Regulators (CoFR) Insurance Forum has set a vision for New Zealand’s insurance sector. The vision is for an insurance sector that is forward-looking, fair, stable, competitive and efficient, promoting informed and confident participation by consumers and business. https://www.cofr.govt.nz/news-and-publications/financial-regulators-set-vision-for-new-zealand-insurance-sector.html

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Find out how to view and download benefit specific policy documents, brochures and application forms (available to Researchmonster and Advicemonster users).

FSCL sees significant increase in complaints over the past year

Financial Services Complaints Limited (FSCL) has revealed that complaints rose by 6% in the last year, to 1,426. Of these, complaints against financial advisers were up by 18% and complaints against insurers were up by 14.5%. The biggest driver of complaints was against lenders, particularly involving car, personal and small business loans. In all, new disputes involving formal investigations by FSCL increased by 10% to 359.

FSCL Financial Ombudsman Susan Taylor has said

“We expect this high level of complaints to persist as long as economic conditions remain difficult. The new rules increasing our financial loss compensation to $500,000 (previously $350,000), which took effect in July, could also lead to a further rise.”

More news:

Quotemonster has added a KiwiSaver comparison and research service

Russell Hutchinson writes about issues insuring those with complex incomes

Financial Advice NZ webinar 'How the latest Dispute Resolution Scheme rules affect you' 14 August

MAS Annual General Meeting 2024 is on 21 August

Asteron Life offers four $5,000 grants to advisers who attended MDRT annual meeting

ANZ has announced that Nagaja Sanatkumar will join its board

ANZIIF has released an IT outage preparedness video

Gallagher Insurance support the Poipoia te Kākano Programme

Westpac announce their first third party Open Banking integration is live

FSC Conference 2024 – special discount offer

The Financial Service Council’s 2024 conference has a focus on life and health insurance, with leaders from the financial, academic and healthcare sectors coming together to foster collaboration and discuss top issues. FSC24 will be held The Cordis Hotel, Auckland, on 15-17 August 2023.

Our very own Russell Hutchinson is the facilitator of the breakout session ‘Genetics, how far have we come?’, which looks at the future of genetics and insurance in NZ. There’s a range of other life and health insurance focused sessions, including ‘Policy Masterclass 2: Looking forward to 2030 - A brave new world?’, ‘Breakout Session: Lifespan versus Healthspan: How technology can help drive healthier living in older age’ and ‘Breakout Session: CEO Strategy: a view from the top’.

LIMITED SPECIAL DISCOUNT OFFER

Quotemonster has negotiated a special discounted rate for Financial Advisers* to join the flagship Financial Services Conference in New Zealand, saving up to $400 for access to all conference sessions.

This limited offer is available to the first 50 Financial Advisers* that register using this link before the 9th of August. Please note to get the discount you must enter the access code FSC24QPR to reveal the hidden tickets as per the screenshot below.

For a full conference pass including Gala Dinner Special we have secured a rate of $1,330 (current ticket price $1,700, saving $370) or a Day Pass Special Rate for Wednesday 4th of September only at $700 (currently ticket price $780, saving $80), as a value add for Quotemonster users.

*To qualify for this special offer, you must be a Financial Adviser listed on the New Zealand Financial Service Providers Register (FSPR). This limited offer is available to the first 50 Financial Advisers that complete registration using this link by 9 August 2024.

More news:

A range of new courses added to Partners Life Academy

BNZ is proceeding with plans to outsource jobs to India

August is Sorted Money Month, with the theme ‘Pause. Get sorted.’

Report lists seven megatrends that could change the future of financial advice

Cost of living for average NZ household climbed 5.4% in June quarter

Quotemonster at FSC24: Professional Advice Leaders Lunch

We are delighted to sponsor the Professional Advice Lunch session at the Financial Services Council New Zealand for the seventh year in a row.

By invitation only: Professional Advice Leaders Lunch facilitated by our Director, Russell Hutchinson which includes a highly informative panel discussion with leaders from the life and health insurance sectors debating the future of genetics and insurance in New Zealand.

This session will be held on Wednesday 4 September, click here to view the full programme.

Upgrading your Quotemonster Account

Upgrading to a paid subscription for your Quotemonster account is super easy to do and unlocks a range of features that will help you supercharge your advice recommendations.

Partners Life appoints new Chief Risk Officer

Partners Life has appointed James Greig as Chief Risk Officer. Greig joins from Southern Cross Health Society, where he is the Head of Risk. Greig has more than 20 years’ experience across insurance and business roles in both New Zealand and Australia. He has held senior positions across strategy, operations, technology and risk roles, including six years as Director of Supervision at the Financial Markets Authority.

More news:

Nominations open for Kiwibank New Zealander of the Year Awards

NZUAC's 2024 Auckland Expo is on August 27

ANZ is being investigated by ASIC over allegations it manipulated Australian government bond sales

The Government hints they’re open to selling Kiwibank to enable it to grow

Lending and investment company Squirrel has been the target of a cyber attack

How long you live is a critical question for financial planning

How long will I live?

This is the single most important piece of information for most financial planning questions. Almost everything hinges on two risks: that you might die ‘too soon’ or ‘too late’. Let us ignore the diversionary idea that there is a ‘right time’ to die and focus on the financial issues.

First, I’m writing about this because I just read an interesting piece about retirees needing to go flatting again as they are unable to live on what super provides. Aged Kiwis ‘only just surviving’ as they go ‘flatting’ again to make ends meet | Stuff The article calls for super to be raised when people hit 80. They even quote that “It hasn’t adjusted for the fact that people live until 100”. This sounds awful – much like how tax brackets are not indexed and due to recent high inflation ...hundreds of thousands more people have been pushed up to higher tax brackets despite not earning in real terms any more

You’ll notice the article doesn’t mention that super was only supposed to support people for a few years between retirement and death – not the decades people can expect now. In fact, this is almost exactly the reverse of unfair to retirees. In this case, longer lives means recipients of New Zealand Superannuation are already receiving much more than was originally intended, because they are living so much longer. Once again, I stress I am delighted we’re all living longer, and long may that trend continue. But what’s going on is that all the mortality risk – in this case the need for loads of extra money because retirees are living longer - is borne by the government. Or, younger taxpayers: aka, your kids and mine, of which there are not enough to support the ever-larger numbers of people who will be claiming New Zealand super.

Let me give you another example. When Germany introduced an old age pension the age of qualification was initially set at 70. This was in 1889, when life expectancy was only about 45-50 years for women, and a bit shorter for men. In fact, only about 1% to 1.5% of the population were expected to make it. This was so nakedly mean that the age of qualification was subsequently moved to 65.

Fast forward to our current situation, where we spend about $19.5bn a year on superannuation - this will jump to about $39bn over the next fifteen years. To match the originally stingy scheme offered by Germany in the 1880s we could move our retirement age up a lot – to something around age 100 would do it. But, of course, that’s ludicrous. We want to care for our older folk, especially those that cannot work. I checked current political parties’ stances on this issue and there’s almost no difference between them. Labour says they want to keep the age of qualification at 65, while coalition parties National, Act and New Zealand First want to move it to age 67. In the grand scheme of things this makes almost no difference. Perhaps it is time to talk about this age change again, as roughly half of all the people aged 65 to 69 inclusive are still in the workforce.

There are some other challenges with our cherished New Zealand Superannuation. The gender pay gap finds exaggerated expression in retirement – because of all those years getting paid more, men tend to retire with healthier superannuation savings in the first place, and yet will sicken and die younger. If they are in a relationship that means the demands of their care drain the couple’s joint savings, leaving less for the women to live on as per the article “…all the couple’s money is spent on care of a male partner, who statistically needs it first. When he dies, women are left penniless and, what we are now seeing more, homeless.” Although I feel immensely for the surviving and impoverished partner, I also feel sympathy for the man who will live a good five to seven years less on average. The more political among you may pause to consider the balance between your desire for, say, an equitable financial outcome between this hypothetical man and woman, and the alternative of considering ways to address your desire for more equitable life expectancy outcomes.

Will this result in more homelessness for women? We do have a lot more homeless people overall. This chart is colour coded blue-ish for National led governments, and red-ish for Labour led ones, so we can be clear about the consistent contribution to this policy outcome from both our major parties.

I couldn’t specifically reference homeless people broken down by age. Although my searches led me to find that men are far more likely to be homeless than women, our generally appalling inability to house people, which is a product of a seemingly shared multi-party neglect for about the last forty years suggest that the threat of homelessness for older people is real. So perhaps we can look forward to more equity in this regard in the future, with women being increasingly thrown out of rental accommodation in their advancing years due to the inadequacies of New Zealand Super.

What might a more logical superannuation policy might look like?

·       Increasing contributions to KiwiSaver would help each person build up a better personal cushion that they can employ based on their own specific circumstances

·       Those that have worked in hard manual jobs and have serious health challenges should be allowed to access their retirement savings earlier and with good advice could choose to consume their retirement fund faster – an option they are not given with state pensions, although, that too could be considered

·       Pushing up the age of eligibility for New Zealand Super would make the scheme more sustainable and could fund a more generous treatment at a more advanced age.

·       We could offer those that defer their pension a higher weekly amount when they do start to claim it.

·       We could do a better job of genuine safety-net benefits and increase the supply of housing to try and avoid a future where there are more elderly homeless people.

·       As an additional tool, when inflation kicks off, we could make KiwiSaver mandatory and automatically increase everybody’s KiwiSaver contributions - leaving people better off financially when older and seeing a more immediate pullback in spending to bring down inflation quicker

No one is really making the case for any of the suggestions above currently, or perhaps more than a dozen others that I have heard talked about by people interested in retirement policy. When financial services companies do, we are accused of feathering our own nests. We must admit that conflict of interest, but we also need to keep telling this story. Retirement policy is too important to be left to just the politicians.