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.
Legal and regulatory update for the life and health insurance sector
MBIE Consultation on changes in regulation of the financial services sector, APRA release on private health insurance, plus ASIC guidance.
22 May 2024 - The Ministry of Business, Innovation and Employment (MBIE) is seeking feedback on options for streamlining how banks and other financial service providers are regulated by the government.
MBIE is consulting on:
• possible changes to the Credit Contracts and Consumer Finance Act.
• changes to the systems and controls financial institutions need to have in place to support how they provide services to consumers, and how the Financial Markets Authority regulates the market.
• opportunities to improve the accessibility and effectiveness of the financial dispute resolution system.
https://www.mbie.govt.nz/have-your-say/fit-for-purpose-financial-services-reform
22 May 2024 - The Australian Prudential Regulation Authority has released its quarterly private health insurance publication for the March 2024 quarter. https://www.apra.gov.au/news-and-publications/apra-releases-quarterly-private-health-insurance-statistics-for-march-2024
22 May 2024 - ASIC has released guidance to financial advisers and Australian financial services licensees about the experienced provider pathway following changes to the law made by the Treasury Laws Amendment (2023 Measures No. 3) Act 2023. https://asic.gov.au/about-asic/news-centre/news-items/asic-releases-guidance-on-the-experienced-provider-pathway-for-financial-advisers/
Government has repealed parts of the Credit Contracts and Consumer Finance Act
The government has repealed some parts of the Credit Contracts and Consumer Finance Act (CCCFA). Commerce Minister Andrew Bayly said of the affordability regulations introduced to the CCCFA in December 2021
“These regulations created unnecessary compliance costs and are an excessive barrier for lending. And worse, the regulations failed to protect the most vulnerable Kiwis – the very people they were intended to safeguard”
The time to process loans increased substantially, with Minister Bayly saying some lenders had told him small loans that used to take two hours to process took up to eight hours to process under the new regulations.
Additional reforms to the act include:
Improving dispute resolution to better protect consumers.
Exempting councils from the CCCFA so they are able to offer low-risk financial products to help households improve their energy efficiency by installing heat pumps and insulation.
Removing duplicate reporting requirements.
We hope that the relaxation on small loans flows through to banks being able to offer more flexibility to people with what amounts to a timing issue, rather than a lending issue. But we know that lending rules are notoriously difficult to manage. This is one of the reasons why aspects of the wider programme are of more interest.
Minter Ellison puts the changes into context within a program of changes to financial law and regulation which the government has planned.
Of particular interest are the changes in supervisions structures with the responsibility for administering the CCCFA moving from the Commerce Commission to the Financial Markets Authority. Lending is a financial product, and we think the Financial Markets Authority, with conduct supervision responsibilities and, essentially, all the other financial products, is probably a good home for this law from an ongoing regulation perspective.
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Jon-Paul Hale highlights issues with digital documents
The Ombudsmen FSCL and the IFSO Scheme are in merger talks
Empower Women breakfast at the National Strategy for Financial Capability Partners Conference
Andrew Dentice urges more discussion on the benefits of open banking
Pharmac outlines funding plans for continuous glucose monitors for type 1 diabetics
Legal and regulatory update for the life and health insurance sector
5 Feb 2024 - The Australian Prudential Regulation Authority (APRA) and Australian Securities and Investments Commission (ASIC) have jointly released a letter to all authorised deposit-taking institutions (ADIs) and their authorised non-operating holding companies (NOHCs) on the Financial Accountability Regime (FAR). https://www.apra.gov.au/news-and-publications/apra-and-asic-release-letter-on-financial-accountability-regime-far-adi
5 Feb 2024 - Minister of Commerce and Consumer Affairs, Hon Andrew Bayly November/December 2023 diary released with the following potential financial services sector related meeting noted:
1 Dec 2023 – MEET: CCCFA Stakeholders Meeting
1 Dec 2023 – MEET: CoFI Stakeholders meeting
1 Dec 2023 – MEET: Commerce Stakeholders Meeting
11 Dec 2023 – MEET: Financial Markets Authority (FMA Staff)
11 Dec 2023 – MEET: MinterEllison lawyers re CCCFA
14 Dec 2023 – MEET: Chair of Banking Ombudsman Scheme (Miriam Dean)
20 Dec 2023 – MEET: Financial Services Federation (Lyn McMorran and Katharine Mcgie)
6 Feb 2024 - The Australian Prudential Regulation Authority (APRA) has published new entries to frequently asked questions on the Australian Accounting Standards Board 17 (AASB17) collections. https://www.apra.gov.au/news-and-publications/apra-publishes-aasb17-update-to-insurance-frequently-asked-questions
12 Feb 2024 - The Commerce Commission has published a statement of preliminary issues relating to an application from Payments NZ Limited (Payments NZ) seeking authorisation to work with API providers and third parties to develop arrangements that, according to Payments NZ, will facilitate a more well-utilised, secure and innovative open banking framework. https://comcom.govt.nz/news-and-media/media-releases/2024/statement-of-preliminary-issues-released-for-payments-nzs-application-seeking-authorisation-to-further-develop-its-open-banking-framework
12 Feb 2024 - Financial Services Council released its Life Insurance Industry Spotlight statistcs for the September 2023 quarter https://blog.fsc.org.nz/life-insurance-industry-spotlight-september-2023
14 Feb 2024 - The Pae Ora (Healthy Futures) (Improving Mental Health Outcomes) Amendment Bill was read a first time and referred to the Health Committee. https://bills.parliament.nz/v/6/955109f7-830e-4b94-2089-08dba9b9dfac?Tab=history
15 Feb 2024 - Minister of Commerce and Consumer Affairs, Hon Andrew Bayly November/December 2023 diary released with the following potential financial services sector related meeting noted:
16 Jan 2024 – ZOOM: Financial Markets Authority (Samantha Barrass & Edwin Metson)
23 Jan 2024 – MEET: Financial Advice NZ (Tony Dench & Heather Roy)
23 Jan 2024 – MEET: Fin Cap (Ruth Smithers)
23 Jan 2024 –MEET: CCCFA Round Table (MBIE Officials, Invited guests)
25 Jan 2024 – MEET: CEO Insurance Council (Tim Grafton)
26 Jan 2024 -MEET: Financial Markets Authority Board (FMA Board & Samantha Barrass)
30 Jan 2024 – MEET: Consumer NZ (Jon Duffy, Gemma Rasmussen, Aneleise Gawn)
30 Jan 2024 – MEET: Commerce and Consumer Affairs Officials (MBIE Officials)
31 Jan 2024 –SPEAK: Financial Services Council (Invited Guests)
31 Jan 2024 – MEET: Banking Ombudsman (Nicola Sladden)
31 Jan 2024 – MEET: Commerce Commission (MBIE & ComCom Officials)
31 Jan 2024 –MEET: Chair of Commerce Commission (John Small & Vanessa Horne)
A year in review
We look back at some of the big industry news, mergers, acquisitions, court cases and people changes in 2023.
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!
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
Nick Astwick explains how Southern Cross Health Society remains economically sustainable
Nick Astwick, chief executive at Southern Cross, has spoken about how Southern Cross Health Society remains economically sustainable. He details the three key things that the not-for-profit friendly society relies on to keep it sustainable.
Nick Astwick, chief executive at Southern Cross, has spoken about how Southern Cross Health Society remains economically sustainable. He details the three key things that the not-for-profit friendly society relies on to keep it sustainable:
· Young and healthy members - Astwick talks about how having younger, healthier members keeps claims down.
· Prevention – a focus on preventing sickness from happening, like a pilot programme the Health Society is running that offers bowel cancer screening.
· Membership growth and retention – ensuring affordable coverage and accessible benefits to help maintain tenure.
More daily news:
Swiss Re release report on the global economic and insurance market
Partners Life "Last Performance” campaign wins at Agency of the Year awards
The FSC welcome the incoming government
Southern Cross Health Society Annual General Meeting 6 December
Asteron Life customers can score a $50 Prezzy card for every $500 in new premium, up to $5000
MAS webinar 'Financial wisdom for a purposeful retirement' 5 December
Sharesies has launched its KiwiSaver scheme to the general public
David Green says mortgage lending should be taken out of the CCCFA and given its own legislation
Chubb has appointed Adit Witjaksono as property manager for Australia and New Zealand
FintechNZ Annual Meeting 2023 rescheduled to 6 December
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