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.
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!
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
Fidelity Life announces expanded careers development programme and new digital, product, service and retention initiatives
Fidelity Life is expanding on its Career connect adviser training course to support financial advisers at different stages of their career. Adviser Edge is due to launch in April 2024 and consists of:
Career connect: For advisers new to the industry (0-1 years' experience), a comprehensive adviser skills and training programme, aimed at attracting and training the next generation of financial advisers to the industry. Fidelity Life have announced two new intakes with spots for up to 15 adviser-nominated candidates and 15 new to industry advisers.
Professional pathways: with places for 50 advisers with 1 – 7 years of experience, Professional pathways will offer customisable and targeted educational resources, training, mentoring and development opportunities.
Advice masters: 30 experienced business owners with 7+ years in the industry will receive a tailored programme, delivered either 1:1 or in small groups on specialist topics including mergers and acquisitions, capital structuring and funding, value optimisation, succession planning, purpose-driven strategy, governance and sustainability.
Expressions of interest for Professional pathways and Advice masters are open now and applications for Career Connect will open in February 2024, with all starting in April 2024.
Fidelity Life have also introduced a suite of initiatives following completion of a series of transformation projects.
Live chat - quick and easy access to New Business and Underwriting teams now live via Adviser Centre.
New-look E-App – a modern an intuitive user experience from March 2024.
Dedicated adviser service team - now available, a team committed to servicing all adviser needs.
Working together - a comprehensive guide covering everything you need to know to do business with Fidelity Life, coming soon.
Signatureless forms - the need for some signatures has been removed and acceptance of digital signatures has been extended.
Transparent turnaround times –turnaround times for new and existing business queries on Adviser hub will be published shortly.
Renewal reminders - copies of customers’ renewal letters for Tahi policies.
Keeping customers covered - automated SMS reminders and outbound calls to customers in arears.
Online masterclass – coming in November: the latest in lapse data and trends and how behavioural science can support customer conservation.
Monthly mortgage repayment - cover benefit percentages to increase from 110% to 115% of mortgage repayments and 40% to 45% of income, to better reflect the high cost of living.
Special events and Future insurability - new Special event triggers to be added as reasons for optional cover increases such as buying investment property, land, holiday home, co-signing a child’s mortgage or supporting a child with fulltime tertiary study. Some exclusions for Special events and Future insurability (i.e., for customers with loadings or special terms) will also be removed to enable customers' better access to these benefits.
Key person new to business and Key person for farmers - monthly cover limits will be increased from $4,000 to $6,500 for Key person new to business and from $5,000 to $9,000 for Key person for farmers covers to acknowledge increasing labour costs.
Repatriation benefit - available on all inforce and new on-sale retail life covers, the newly added benefit will be on top of the life cover sum insured and will be accessible to repatriate a body home from and to New Zealand.
Trauma stand-down period - the stand-down period will be adjusted to start on the date of application submission, not completion of underwriting, to acknowledge pressures within the healthcare system which can cause underwriting delays.
More daily news:
Katrina Shanks writes how first-home buyers can take advantage of lower house prices
National calls for Labour to confirm plans for the Income Insurance Scheme
How intermediaries can prepare for CoFI
MinterEllisonRuddWatts has published an article on how intermediaries can prepare for CoFI.
They define who qualifies as an intermediary and a consumer; outline insurers’ obligations in setting up and maintaining a fair conduct programme; outline what intermediaries can expect financial institutions to ask them for when assessing distribution methods; give examples of what contractual agreements should contain in terms of expectations, commissions, assurances and how to remedy deficiencies; highlight the need to review internal policies.
They make the point that intermediaries which are FAPs warrant a lower level of controls in relation to their distribution arrangements, as they are already regulated and pose a lower level of risk.
If you’re still getting your head around CoFI obligations, we recommend you check it out.
More daily news:
Grant Robertson reconfirms that the NZIIS is still on hold
Registrations open for Financial Advice NZ’s Thrive 2024 Annual Conference 5 – 6 March
Voting for Financial Advice NZ Board Member Director (Risk) is open
Katrina Shanks writes about teaching children financial literacy
Partners Life ‘new adviser’ online training course starts 16 October
Oncologists write an open letter to Pharmac, advocating for newer and better-funded medication