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.
Quality Product Research – Major Review: the proposed rating for Special Events and Future Insurability
Special Events Increase (SEI) and Future Insurability Option (FIO) increases are valuable but often underutilised features in products like Life or Trauma insurance. Recently, we were challenged by a rated company on our methodology for assessing these benefits. As a result, we have initiated a major review of these items.
Introduction
Special Events Increase (SEI) and Future Insurability Option (FIO) increases are valuable but often underutilised features in products like Life or Trauma insurance. Recently, we were challenged by a rated company on our methodology for assessing these benefits. As a result, we have initiated a major review of these items.
While SEI and FIO share similarities, they cater to different needs:
Special events increases are reactive to life milestones.
Future insurability options are proactive, providing periodic opportunities for growth. This is an optional feature to be selected at application time, and often results in an increase in premium.
Both features provide flexibility, especially as life circumstances evolve, and combining them offers the best of both worlds.
· Our review aims to assess the following:
· The sub-items used for each benefit.
· The weightings applied to each sub-item.
· How the Amount score should be captured: per event, allowable increase at policy anniversary, or total maximum increase over the life of the policy.
Key Considerations for Scoring
Per event: Capturing the increase per special event may highlight significant variations in amount scores between insurers. However, this could lead to confusion, as insurers often apply different limits to different special events.
Over lifetime of policy: This approach would provide more straightforward scoring but may result in most insurers receiving the same amount score, which could fail to reflect nuanced differences in limits for specific events.
Below, you’ll find our proposed sub-item list with preliminary weightings. These weightings will be refined based on feedback received during this consultation process.
Review process
Our review began with internal discussions and a comprehensive analysis of policy wordings across the market. We have conducted an initial review of the sub-items, and our next step is to seek feedback from insurers and reinsurers. Once all relevant information has been gathered, we will make appropriate updates to our database and share the new ratings on our social media channels.
Your feedback
We highly value your feedback on how these wordings are being applied in the real world. Please email us at info@quotemonster.co.nz with details of your experience to help us refine our understanding, or alternatively please use the Adviser Claims Experience on Quotemonster to log your claims experience, a video on this feature can be found here.
