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.
KiwiSaver financial hardship withdrawals continue to rise
KiwiSaver hardship withdrawals are up significantly from this time last year. We take a look at the limited set of circumstances under which members can make hardship withdrawals.
There is a limited set of circumstances under which members can make hardship withdrawals: if you cannot pay your minimum living expenses; if you can’t keep up with your mortgage or rent; if you need to modify your home to meet special needs; if you need to pay for medical treatment or funeral expenses; or if you’re suffering from a serious illness. The withdrawal function is intended to be a last resort when you have no other options available.
The Financial Services Council has a set of guidelines illustrating how applications will be covered. The intent is to limit withdrawals to meet the basic necessities of everyday living. For example, accommodation expenses can include rates, insurance and basic maintenance but if someone was living in excessively luxurious accommodation and could move to more modest accommodation their excess accommodation costs aren’t regarded as a ‘minimum living expense’. Members are generally unable to claim for things like paying off fines, hire-purchase debt for non-essential expenses or travel to see a sick relative.
So how do members file for a financial hardship withdrawal? Members need to fill out the application, which can include a lot of paperwork – you may need to provide bank statements, proof of identity, pay slips, proof of address, quotes, information about your partners income, assets and expenses and so on. If a member is applying as they cannot meet their minimum living expenses, KiwiSaver Managers and Supervisors will use a weekly budget spreadsheet to analyse the members income, expenses, assets and liabilities to determine if there is a deficit. The budget will take into account basic food and grocery items, accommodation and associated costs such as rates, basic clothing, utilities, transport (up to two vehicles per household and public transport as applicable), general and medical insurances, medical and dental costs (excluding non-essential medical costs such as cosmetic dental treatment), school attendance costs, purchase and maintenance of normal and basic household items, reasonable costs for dependants with special needs.
The member may also need to show they had tried to find other ways of getting by, like accessing government assistance schemes or arranging different repayment arrangements from the bank. Reasonable alternative sources of funding need to have been explored and exhausted – If you have other liquid savings or investments, you will most likely need to have used those up first before withdrawing from KiwiSaver is an option.
After a holistic assessment of the member’s circumstances, if the member establishes they are unlikely to be able to meet minimum living expenses, then the withdrawal is permissible.
If you have a serious illness, you can withdraw up to the full value of your accumulation; however, if you are withdrawing due to an inability to meet minimum living expenses then you will generally be approved for living cost payments in 13 week allocations.
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Kiwibank report $202 million after-tax profit
Kiwibank posted a record $202 million after-tax profit for the year to June 30 2024, up 15% from the previous year.
Kiwibank has featured in the news a lot recently, from the Commerce Commission’s recommendation that the Government should consider what is necessary to make Kiwibank a disruptive competitor, to the release of Kiwibank’s latest financial results.
Kiwibank posted a record $202 million after-tax profit for the year to June 30 2024, up 15% from the previous year. Kiwibank were able to grow their lending book by 9.3% to $32.4 billion. Impressively, home lending grew 2.7 times faster than the market and business lending grew 3 times faster than the market. Deposits increased by $2.4 billion, growing the deposit book by 9.4% to $28.2 billion
Steve Jurkovich, Kiwibank CEO, has said a $500 million capital infusion would
“give us a lot of runway to keep growing as fast as we are now, which is 9.5%, 10% [per annum], which is pretty large gains. That sort of investment over the next three, four years would give good runway.”
"With the right support and delivery of the right business plan and right initiatives, I think we could double our size in five years.”
Jurkovich has also said it may not be essential for the bank to remain 100% NZ owned, pointing to other examples of successful majority owned businesses like Air New Zealand. Jurkovich cautions that any requirement to pay sizeable dividends could impact their ability to grow, given that capital growth to date has mainly been via retained earnings.
Mortgage advisers now account for around 35% of Kiwibank’s total mortgage book, having originated 71% of Kiwibank home loans this year. Kiwibank’s accredited advisers have grown to about 1,000 now, up from 250 at June 30, 2022.
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Report on the MAS 2024 Annual General Meeting released
Antonia Watson says the big banks can't afford to be NZ owned
TSB respond to the Commerce Commission’s banking study
FinTechNZ Hui Taumata 2025 is on 11 March 2025
Investment News release their KiwiSaver annual report
Study finds a majority of New Zealanders feel financially uncomfortable
Fidelity Life extend 3 months free until 31 December 2024
Fidelity Life has extended their 3 months premium free offer until 31 December.
Fidelity Life has extended their 3 months premium free offer until 31 December. All new customers who take out an eligible policy will have their premiums covered for the first 3 months.
The offer is available to eligible new Platinum Plus, Platinum Plus Level Term, Mortgage Protectors and NZHL Life policies that are illustrated between 1-May and 31-December 2024, submitted within 30 days of the illustration being generated and issued within 6 months of the offer period end date.
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mySolutions webinar 'Introduction to Milford Asset Management' 21 August
The IFSO Scheme investigated 479 complaints in the past year
Financial Advice NZ 'Professional Ethics Workshop' is on 22 August
Financial Advice NZ's 'Strategies Summit 2024' is on 21-22 August
FinTech webinar 'Exploring the Australian fintech landscape' 19 August
KiwiSaver assets rose $3.5 billion to $110.8b at the end of the June quarter
Huge increase in the amount of chemotherapy being provided by the private sector in recent years
John MacDonald suggests compulsory health insurance is the answer to Health NZ’s overspend woes
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!
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
Australia’s Federal Government seeks feedback on the use of genetic test results by insurers
Australia’s Federal Government has opened consultation on the impacts of life insurers utilising genetic test results in underwriting.
Under the Insurance Contracts Act 1984 consumers have a responsibility to provide information requested by life insurers, including any genetic testing results. In 2018, a report by the Parliamentary Joint Committee on Corporations and Financial Services identified concerns that life insurers using genetic tests in underwriting was negatively impacting participation in health research projects involving genetic testing.
In 2019, Australia’s life insurance industry introduced a partial Moratorium on the requirement to disclose genetic testing results. Life insurers could only request or use the results of a genetic test if the total amount of cover a person has exceeded set thresholds. The Moratorium also stated that life insurers would not require or encourage applicants to take a genetic test as part of the application. The Moratorium was introduced due to concerns that people would not undergo genetic testing for personal health reasons or participate in medical research that involved genetic testing because they feared that it could negatively impact their ability to obtain affordable life insurance.
A report by researchers at Monash University investigating the impact of the Moratorium found it is discouraging consumers from participating in clinical genetic testing and in medical research which involves genetic testing. The report also found that life insurers were not complying with the Moratorium, and were asking applicants about genetic test results when the applications fell below the financial thresholds. The report also deemed the financial limits were too low. The report’s recommendations include the Government amending legislation to prohibit insurers from using genetic or genomic test results to discriminate between applicants for risk-rated insurance and that the Government consider ensuring insurers are subject to a positive duty to not discriminate. Consultation is open until 31 January 2024.
We spoke to Russell Hutchinson to get a New Zealand perspective on this issue:
Currently New Zealand has no legislated approach to genetic testing. There are similar consumer movements to that in Australia, which highlight the risks to consumers and their families when they delay obtaining genetic tests because they are concerned about the impact on their ability to obtain insurance coverage. A good synopsis of this from the medical viewpoint is given in this Radio New Zealand piece. It does not discuss the value of having a functioning insurance sector or examine how this relies on the ability to charge different premiums for different risks or in some cases, decline to insure a person. Naomi Ballantyne offers a succinct summary of an underwriter’s perspective in this article at Good Returns.
Occasionally, consumer fears may drive choices which are also damaging to the insurance market – for example, delaying a test to take out coverage and then lapsing the coverage if the test results show no increased likelihood of developing the condition. There may be value in offering some form of reassurance to consumers to limit the impact of genetic testing on insurance. Personally, right now, I would encourage anyone contemplating a genetic test to place their health first and obtain the test.
The Financial Services Council (FSC) regularly reviews its stance and industry guidelines on genetic testing to ensure they reflect best practice globally; they have reiterated that it is important insurers understand a customer's risk profile as part of the underwriting process.
"Some insurers may ask customers to disclose known information about the results of their genetic tests. This is consistent with asking customers other questions about their risk profile - for example, their family history.”
"Genetic testing is not something that any of our members ask their customers to carry out. Overall, FSC believes a fair position is one that balances the interests of consumers and the medical community to advance genetic science, and which manages financial risks to insurers and all policyholders."
Recently the FSC has held a discussion group with representatives from the insurance industry and the medical community to discuss the challenges that genetic testing present. A working group has been established to improve outcomes from genetic testing. Currently, RiskInfoNZ is running a poll to find out if people will see a time when genetic tests will play a part in clients applying for life insurance.
More daily news:
Gold Band Finance is the first non-bank deposit taker to get an FMA Financial Institution Licence
Proposed changes to the NZCFS Level 5 will be published on the Ringa Hora website early next year