moneyblog

Hurricane Sandy Six Months On ...

Six months after the devasting Hurricane Sandy hit the east coast of America, the cleanup is still a work in progress. The Storm that caused some $50 billion in damage and killed 159 people has not been forgotten.

Below are some snapshots of Hurricane Sandy by the numbers. Graphics sourced from Property Casualty Insurers of America.

Head of over to Risk Management Monitor to read more.

IFA Conference - Researching Product Providers

Today I am sharing a session with Richard Dean of the Reserve Bank on product providers. I am covering the advice process aspects of selecting providers and Richard Dean is covering the Insurance (Prudential Supervisions) Act.

As a part of that session we talk about how to go from the starting point of the universe of insurers that are licenced in New Zealand down to the actual set that you consider as an eligible group from which you will identify appropriate products for your clients.

In that session I talk about the criteria you use to get from universe to an approved provider list - and we have produced a handy spread-sheet to help you with that process. Here is how it works: 

1. It shows the universe and has some company data and a selection screens so that you can apply your criteria consistently across all the insurers to arrive at a preferred provider list.
2. The tool allows for you to add additional criteria and ignore the existing criteria if you wish.
3. There is an example draft 'approved providers' document, detailing the companies selected by an example adviser, and showing how to communicate the reasons for their selection.

Please remember the tool is for advisers, or anyone else in the industry who is interested in the process, and it is not meant to recommend one insurer over another - only to illustrate how an adviser might approach the process of developing a preferred provider list. If you are a consumer seeking to purchase cover then we point out that this is not advice, and you should contact a financial adviser.

Download IFA Approved Provider Decision Screen v3

 

IFA Risk MasterClass

The IFA are hosting the Risk MasterClass Workshop in Auckland this week.

Russell Hutchinson is presenting on the following:

1. Tuesday at 3.35pm - Researching Providers: Russell will identify the key approaches is narrowing the ‘whole universe’ of providers down to your proposed product provider list and then hand over to Richard Dean of the Reserve Bank who will cover the new Insurance Company Supervision regime and also cover financial stability ratings in more detail.
2. Wednesday at 10.45am - Researching Products: Russell will explore the key factors in business insurance product comparison, the requirements of the comparison process, and the differing responsibilities of researcher and financial adviser in creating a good process for product selection.

The following people are also presenting throughout the two-day workshop:

• Barry Read
• Chris Louisson
• Cecilia Farrow
• Jeremy Bendall
• Richard Dean
• Stephen Potter
• Kim Fitzgerald
• Peter Mensah
• Jane Durrant
• Kate Gilmore
• Tony Vidler

Our best wishes to all participants and presenters. It looks like a good programme.

The PAA Awards

I spent an entertaining evening at the PAA Awards dinner on Friday night. The event was well run and was obviously the cheerful conclusion to a good conference. Attendees were there in great numbers and the awards ceremony was all about advisers - there were awards for companies, but the emphasis was strongly on advisers. Adviser finalists had the biographies read out so that other advisers could get an understanding of their achievements, the award winners gave clear thanks and credit to the advisers and other people that helped them to obtain their success. The evident emotion and gratitude to fellow advisers - also present with the passing on of the role of President - showed that there was a strong sense of community in the association.

 

Helping Clients Put A Value On Their Income

This calculator at "what's my income quotient" simply and quickly creates a figure for your future earning capacity, and adds a neat calculator for your likelihood of having a long term disability. It's a worthwhile addition to the income protection ales toolkit. Link.

Cavalcade of Risk Number 183

The 183rd Cavalcade of Risk is brought to you from New Zealand. For our international guests this country is also sometimes known as The Shaky Isles, and in consequence it is also home to some of the largest insurance claims in the world, recently. But let's start the Cavalcade with the regulars:

REGULAR CONTRIBUTORS

Leading the regular contributors to the Cavalcade we have Emily Holbrook with "What Makes a Great Risk Manager: a Q&A With Michael Lopez of Booz Allen Hamilton"  published over at The Risk Management Monitor. Michael Lopez, senior associate at Booz Allen Hamilton offers his take on the role of the modern risk manager.

http://www.riskmanagementmonitor.com/qa-with-michael-lopez-of-booz-allen-hamilton/

Next up we have a submission from Julie Ferguson of The Workers’ Comp Insider of a post authored by Jon Coppelman – "Freedom of Religion = Freedom from Workers Comp?" Jon Coppelman of Workers’ Comp Insider looks at the fascinating clash between one state’s attempt to enforce public policy in protecting workers in the face of a strict religious commune that doesn’t believe in the concept of insurance. There was a time when religious prohibitions on insurance were common - the principle of the sanctity of human life being extended to a ban on what were seen as unseemly wagers on death.

http://www.workerscompinsider.com/2013/04/freedom-of-reli-1.html

Then we have "Are We Taking the Wrong Retirement Risks?" from Jason Hull at hullfinancialplanning.com. This article examines how we should be using mental accounting to allocate our investments to appropriate risk pools in our retirement portfolio.

http://www.hullfinancialplanning.com/are-we-taking-the-wrong-retirement-risks/

Louise at The Colorado Health Insurance Insider posts on "Balance Billing From Non-Network Providers Who Work At In-Network Facilities." Jay Norris tells us "This has been a frustrating problem for us for years. Non-network docs getting the benefit of working at an in-network hospital. Patients do their due diligence planning in-network care and still get balance billed by the out of network docs. The Colorado Division of Insurance tried to fix it, but got sued. They could have gone about it better for sure. Please read this and let us know if anybody has any advice!"

http://www.healthinsurancecolorado.net/blog1/balance-billing-fro-non-network-providers-at-in-network-facilities/
 
Henry Stern, LUTCF, CBC at InsureBlog posts on "Cost of Living: DI & LTCi" InsureBlog has news about two critical financial risk management tools, disability income and long term care. This month is Disability Insurance Awareness Month, and the cost of long term care itself is (no surprise) increasing rapidly.

http://www.insureblog.blogspot.com/2013/05/cost-of-living-di-ltci.html

Jason Shafrin gives us "The Most Important Health Policy Study of Our Generation" from Healthcare Economist. He asks: Does Medicaid improve health outcomes or reduce financial risk of beneficiaries?  The Healthcare Economist reviews the Oregon Medicaid study, one of the pivotal studies of our generation, and finds significant decreases in beneficiary out-of-pocket cost, increases in access to care, but little to no effect on health outcomes.

http://healthcare-economist.com/2013/05/08/the-most-important-health-policy-study-of-our-generation/

SELECTED BLOGS FROM THE UK, SOUTH AFRICA, AND AUSTRALIA

Looking for positive posts about insurance made me sensitive to this headline: Where’s the coverage? Insurance in the news, by Nick Kellingley, of a UK tech provider's site to the insurance industry.

http://www.insurancesoftware.co.uk/wheres-coverage-insurance-news/

From a traditionally dynamic market - South Africa - this post about obtaining cover for mountain climbers appealed to the daredevil in me. I know that plenty of Kiwis have sought similar cover. "Insurance for professionals participating in mountain climbing and extreme sports"

http://www.insurancechat.co.za/category/disability-insurance/

From our near neighbours I found this post "I've been fortunate" which shows that like New Zealand, Australia is also grappling with the fact of underinsurance, and real risks.

http://blog.lifewise.org.au/2013/03/ive-been-fortunate/

NEW ZEALAND POSTS AND ARTICLES
 
From New Zealand we kick off with a post from Philip Macalister at goodreturns.co.nz has a good post calling on the industry to reframe the underinsurance debate. He has a point.

http://www.goodreturns.co.nz/article/976500774/let-s-reframe-under-insurance-debate.html

Graham Matthews at interest.co.nz covers the changes happening to the way insurance policies on homes in New Zealand are shifting to a sum insured approach. You need to know about this.

http://www.interest.co.nz/personal-finance/64257/graham-matthews-says-recent-and-significant-changes-house-insurance-will-have

To underline the importance of communication on this point we have an article on stuff.co.nz reporting on a survey showing that most Kiwis remain unaware of the change.

http://www.stuff.co.nz/business/8430964/Survey-shows-insurance-ignorance-is-rife

Kelly at our own Quotemonster blog posts about the readability of New Zealand insurance policies drawing on a report I prepared a couple of months ago for consumer groups.

http://www.quotemonster.co.nz/Blog/post/2013/05/13/Readability.aspx

Also at stuff.co.nz, Rob Stock talks about his experience filling in insurance forms - and guess what? You should be honest.

http://www.stuff.co.nz/business/money/8668950/Golden-rules-for-insurance-forms

Finally Diana Clement, in the New Zealand Herald, talks about liability insurance for the non-expert.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10882898

NEXT CAVALCADE

The next host is Jeff Rose. Get typing and submit your articles to the Cavalcade. Jeff can be found at:

http://lifeinsurancebyjeff.com/

Longer Life, Better Health?

Those interested in the extension of healthy life can check out this report from the Statistics Department. Link.

Rob Stock on Filling In Insurance Forms

Rob Stock has a pretty good piece on filling in insurance forms. Plainly written from personal experience it has a sharply real feel to it. Key points are:

• Opening with a story about non-disclosure
• Explaining that this is the leading cause of claims being declined
• Talking about the difficulty in getting a copy of his medical records from his doctor's office
• Explaining the need to make sure you do not forget to disclose everything on your insurance form

It particularly caught my eye as I had just finished writing a piece for the next Asset magazine on claims, although my piece tends to focus on the role of advisers in helping to make sure clients are clear about what they can and cannot claim for.

Link to Rob's piece.

Reverse Mortgages Making A Comeback

At least in the US, signs are emerging of a thaw in the Reverse Mortgage market with more loans, and larger loans, being taken out at a  younger age. Although that average age is 72. Link.

Insurance Industry Licensing Update

The RBNZ has published an update on the insurance industry licensing process here: Link.

Retirement Funding

Amanda Morrall has this on the "looming retirement funding crisis" link.

Fees Instead of Commissions in Risk Sales - Australia

The article you can find at this link contains quotes from a well-known Australian adviser and comments from a number of other advisers on the concept of swapping commission for fees in the risk sector of financial advice. If you are interested in this potential development I recommend you set aside 20 minutes and read the entire thread.

Nigel Tate on Financial Services Council Replacement Forms

Goodreturns has a good article quoting the Nigel Tate on the FSC replacement business advice forms (link here). Nigel makes some good points. I think an opt-out should be allowed where an adviser who has met the compliance requirements for replacement business (see link here) can avoid using the FSC forms and brochure by attaching to applications a copy of a signed statement of advice, or equivalent, which covers all these issues.

Congratulations Fidelity on TOWER

Congratulations Fidelity on the acquisition of most of the TOWER Life business. Link.

Perpetual's Move Prompts Law Change

The NZHerald has this piece about the proposed law change under the heading of an article on Capital + Merchant. Link.

RBNZ Updates Guidelines to the Exemption for Small Insurers

You can find the updated guidelines at this link.

Major Causes of Death, NZ data, 2009

Obviously we aren't breaking them down by age here, although we do have that from a claims study from a couple of years prior.

nib Has Appointed NZ CEO

Congratulations to Robert Hennin on his appointment as CEO, nib. Link.

Asteron Increases Maximum Income Insurance Limits

Asteron has announced increases to the maximum cover levels for income protection. Link.

Asset Magazine Technology Survey

Tarawera Publishing - publishers of Asset Magazine and the NZ Mortgage Magazine - is running this survey of advisers to find out what technology is being used and how it helps you run your business.

They will produce a series of articles in ASSET and the NZ Mortgage Magazine with the results. Why not  take a few minutes to complete this survey and contribute to better knowledge of what advisers need in technology and tech support?