moneyblog

nib Changes to Premiums

From 1 July nib will be adding a $5.75 per month policy fee to policies, they will also introduce a multi-life premium discount of 2.5%. Below is a table of changes by product.

Click here to read more. 

Could your Fitbit "make you uninsurable"?

The New Zealand Herald has this piece with the rather dreadful heading: "Your Fitbit could make you uninsurable in the future". To which the answer is obviously, no it cannot. To literally make you uninsurable, it would have to limit your life-expectancy to the point that you cannot be insured. I am pretty sure that is not what the Herald means. To judge by the article, they appear to mean that the data could reveal something about you, which could make you uninsurable. But even this is ridiculous. A Fitbit isn't like a genetic test, which could suddenly turn a vague suspicion (otherwise why did you take the test) into confirmation of something serious.

Fitbits measure personal activity, and a bit more if you want them to: heart rate and weight are the other two most common measurements. But the author of the headline, at least, perhaps doesn't appreciate that even quite seriously out of shape people can get life insurance at ordinary rates, it has to be really bad to not get cover at all. So much so, that it isn't your Fitbit data that is going to push you over the edge, it will be as simple as your height and weight. Perhaps there are some people who will prefer to blame their Fitbits, but that's just a slightly more modern version of the denial that reluctant dieters have practiced for decades: blaming the scales. Apart from the headline, the article is quite good.

 

Asteron Life Appoints new Executive Manager, Life Distribution

Graham Hill has been appointed to the role of Executive Manager, Life Distribution. Congratulations to Graham on his appointment.

While necessary, it is no longer enough to have processes in place…

While necessary, it is no longer enough to have processes in place to identify and deal with problems - such as monitor for and apply a management plan when a problem is identified. Instead, to obtain a license, it is now necessary to be able to state and demonstrate how one is actively working good processes and monitoring to ensure that there are no problems, and then regularly report and record that fact at the appropriate level within the entity.

That’s why so much compliance work is focused on recognizing conflicts, creating appropriate processes, and then setting up controls and monitoring. Good governance is more than effective management, but it entirely supports and facilitates effective management.

Business, by definition, is not a solo activity. Governance, more so. I don’t think effective governance can possibly be performed by one person either. It’s essence is checks and balances, requiring a perspective bigger than any one individual. If you’re scared of letting go of all the control you have as ‘the boss’ you need good governance more than most - and it will be harder for you to achieve it. But here’s the key, if you’ve ever been frustrated at your ability to get your business to change in the way you want, good news: good governance is exactly the tool you need to use.

Open Letter to Fair Go on Insurance and Advisers

Adviser Bruce Cortesi has written this open letter to Fair Go who recently aired a piece about a declined claim due to non-disclosure. He is critical of the programme - which appeared to exclude any sensible discussion of why the applicant failed to disclose that they had sleep apnea. He is also critical about their subsequent handling of questions and comments on the programme on their facebook page. He makes many good points - so well worth a read.

Sovereign sharpens Level Life rates

Sovereign have announced some changes to Level Life rates for 'to Age 65' and 'to Age 80' Level Life rates, starting today. It was a bit short notice, as the details we given to us on Friday, but the updated rates will be live on Quotemonster tomorrow. Subscribers to Chatswood's life premium comparison database can expect to see an updated database in the next few days.

Code feedback piles up

Investment News NZ has written that the financial adviser code ‘concept’ proposal has attracted more than double the number of submissions racked up by the draft legislation underpinning it. Click here to read more. It will be good to take a look through the submissions and see what major themes emerge. Even better if some early discussion of those themes is possible - perhaps led by an update to the CWG blog.

The Secret to Learning New Skills Twice as Fast

According to this article changing up your routine when practicing a skill or task will result in quicker learning. New research says you could even half the time it takes to acquire a new skill just by practicing a slightly modified version of it. If that sounds oddly disconnected to current issues, re-frame it this way. How do you approach, say, changing how you talk about your business or your role in the business? When was the last time you practiced, recording your elevator pitch, and playing it back to see how it sounds? Did you get feedback on your last presentation? How did you change your practice after that? Choose a different task and try the approach of making small changes to that too. Hat tip to my son who drew this to my attention after hearing me practice the piano, effectively, the same way every day for several days... it is genuinely humbling when you are schooled by your kids, and they are right.

Men's Health Week

From the 11th - 17th of June is Men's Health Week in New Zealand. Accuro have created a health survey for men and are offering free Men's Health Check's at participating pharmacies around the country. Click here to take the quiz and to find out more. 

In case you missed it: the link to the RBNZ comments on commission

RBNZ is looking into the conduct and culture in the banking and insurance industries and has made this statement: “Life insurance commissions are particularly high, which inevitably flows through into higher premiums.” The Bank also states that with possible technology advancements in the future there could be a 'profound impact on the insurance sector.' Click here to read more. 

There are definitely efficiency questions to be asked about life insurance in this country. It is always unwise to single out any one channel - as other distribution channels are similar costs. So commission alone, while part of the premium picture, is insufficient to explain the pricing of insurance as a whole.

Preventable Deaths

New Zealand has a high rate of suicide deaths, and it is worse than it was. What have we made significantly worse? Once our rate was similar to the UK's. Then the UK learned something and managed to reduce the rate, while our rate of suicide rose substantially. Recently it has fallen a bit - but not back to historic levels, and is a lot worse than the United States, and the UK. Here's an age-adjusted comparison with selected countries. I've included Japan to balance the view: showing that other modern countries may also struggle with this difficult problem.

You can read more about the subject by going to the subject page at Our World In Data - link here.

Fidelity Life Product Enhancements

Last month Fidelity made a number of enhancements to their product range after listening to feedback from advisers. The policy documents have been made more consistent across the benefits using the same definitions and benefit names where applicable making it easier for clients to understand. 

According to Fidelity Life here are their 6 key upgrades:

 Here is a brochure outlining more of the upgrades in detail.  Download Life Upgraded Summary for Advisers

Kepa appoints Brendon Neal as Chief Executive Officer

Congratulations to Brendon Neal on his appointment as CEO of Kepa.

Insurtech not a one-way bet

Start-ups of any kind are not a one-way bet, and while there is plenty of money to be made in the insurtech sector, there is plenty to be lost too. Development capital is being raised for insurance ventures of all kinds: at different parts of the value-chain, support, back office, sales, needs analysis, for advisers, for direct to consumer, and on and on. Huge sums are being spent, and most will be wasted - because only a few of these ideas can succeed, even if they all had good ideas, and great execution, the market cannot sustain them all. It is not, therefore, surprising when a start-up fails, as Mosaic is reported to have done recently. As a business owner I am always distressed to hear when projects like these do not succeed. I hope the people involved can find a place for the good ideas they have elsewhere.

Quant analysis shows "closing techniques" make no difference

This analysis, including good quantitative analysis shows that closing techniques make no difference to overall sales rates. Well worth reading the whole thing- about 5 minute read. Link.Hat tip to Tony Vidler for finding this one.

Scientists claim breakthrough after terminal breast cancer cured

After seven types of chemotherapy failed Judy Perkins was given just months to live but has since be has been “cured” by an injection harvested from her own immune system.

'Using a technique called adoptive cell transfer, scientists removed a tumour from her chest and determined which friendly T cells within it were capable of recognising the harmful cancer cells.

Over eight weeks, the team at the National Cancer Institute harvested the T cells into an army of 82 billion and then injected them back into Ms Perkins, turbocharging her immune system against the cancer.'

Click here to read more. 

Warning on IP Premium Tax Deductibility

The Australian Taxation Office is allocating resources to investigate whether the tax deductibility of income protection insurance premiums is being claimed appropriately. Click here to read more. Of specific concern is the constant addition of non-income-related benefits (such as death benefits, and lump sums for specific conditions) which should not be tax deductible are growing to the point that they will need to be excluded. At which point companies may be faced with a choice between offering 'pure' income protection policies, with few add-ons, and continuing down the current track. If you like the idea of clients taking advice on each of the main risk protection benefits and constructing a complete plan you may like the idea of 'pure' IP contracts too, it could help remove double-ups and confusion.

On Paying for Advice

Good advice looks easy. Most people want a shortcut. Just tell me which one. Tell me what to do. Make it quick, make it simple. Plus, advice looks kind of unlimited. Most decisions aren’t irreversible – so we assume that we can always change things if they aren’t quite right. The bliss of not knowing.

They don’t know the danger that ignorance brings.

So: people find it hard to pay for advice.

But they do want to have some expensive things. They would like the right to complain and get things fixed when they don’t work. They would like the right to bang the table and say – “But you didn’t tell me that!” if something goes wrong. That costs money, because to make sure advice, which sometimes comes with a recommendation for some action or behaviour to be taken by the client, and also, often, a specific financial product, is complicated. The six-step advice process requires care diligence and skill. Care takes time, so does research, skills are costly to acquire. Governance and quality assurance processes incur expense. Systems to support the whole activity need to be bought and maintained. Taking the time to follow up and coach people on sustaining their commitment to their financial plans is expensive too.

So, people have to pay for advice to get these things. Unless, they think they can get them for free.

Improving conduct regulation is probably vital for maintaining broad confidence in markets, institutions, and processes. Having said that, if you make conduct obligations very broad they will overlap substantially with the provision of financial advice – leaning against the need to pay for advice. Like everything, it’s a balance.

My latest piece on goodreturns (at this link) explores this theme a bit further.

 

 

Don Stewart: An Adviser View on Soft Commissions

Don Stewart, of the Stewart Financial Group, has a strong view on soft commissions - and he's against them. I found this article interesting because it is the first I have seen by a financial adviser which strongly expressed an opposition to soft commissions, and explained that in detail. I am sure there are others.

Risk Info Series on Grief

Risk Info has started a series on helping your clients deal with grief. Helpfully this talks about both grieving for a friend or relative that has died, but also for the loss associated with a serious illness or major trauma. Worthwhile material for the the full-service adviser, and those of us with an interest in the whole process. Link.