moneyblog

Replacing business: the stand-down period a litmus test for advice

Knowing that there is a stand-down period, and advising the client who is buying the cover, is essential. It doesn't matter whether you are a financial adviser, or just a sales person, this fact is essential to the sales process where someone has to know they are not being covered, for a time, for certain conditions. Consider this example at goodreturns.  

Knowing that you can get the stand-down period waived, if the case is replacement business, and then going ahead and getting it waived for the client is a good example of a test. Non-advisers, working for a single provider, rarely know this. Advisers know this and make that knowledge available to their clients. There are plenty of other examples. Like knowing that an insurer generally underwrites on the basis of the total cover in-force, not just the bit that you are applying for. It changes the way you approach the underwriting process. Thinking insurance is a commodity is something that non-advisers assume, advisers know better, and so on... I am sure you can think of more. 

Get a better insurance report - put your compliance documents on Quotemonster

You can now have the Quotemonster report customised to your business to include your compliance documents, and make the report fit the order and structure of the advice process you have agreed with your compliance professional. In conjunction with Barry Read, of IDS, Quotemonster has commenced tests with groups of advisers with customised reports. Now is the time to re-work your advice process, and to make sure it happens for every client, the best thing to do is build it into the reports we prepare for you. That way, every client will have the right documents, unique to them, and now, unique to you. 

Code Committee Announcements, and Adviser Reaction

Firstly, congratulations to the Code Committee members. You can check out at list over here, if you haven't already done so. While there will certainly be rewards for Code Committee membership, there is a strong service component to membership, and so thank you to the Code Committee members for being prepared to participate in that. 

Like many of the advisers commenting on the Code Committee membership I am disappointed that there doesn't appear to be a specialist in insurance advice, nor, in fact, an adviser of any kind that does not work solely for one product provider. As a consumer I have always believed in comparison shopping and independent advice. Disappointed, but not altogether surprised. Not surprised because advisers typically run small businesses, and by that  I mean any business with 50 or fewer staff, or where, say, more than 25% of the revenue comes from the efforts of that one person. It is hard to leave this precious business to spend variable amounts of time on the work of the Code Committee. Plus, you can see already, that the work is public, and likely to come with a fair quantity of criticism. My thoughts are particularly with Angus Dale-Jones, who, as chairperson of the group, will front a lot of the issues and will therefore wear a lot of the flak. There will be flak. 

The lack of a good insurance advice participant need not be fatal. The Code Committee is the core of a process which needs to take input, and be seen to be taking input, from the wider marketplace. The problem of committee composition is one that I am sure has been difficult to work through. Trade-offs would have been made. I hope that the committee can take into account the compromises that were made and compensate for them during the consultation process - and get the views that aren't your own through the committee process. 

FMA: Robo-Advice Exemption Consultation

The FMA has released a paper seeking feedback on a proposed exemption to allow robo-advice for personalised financial advice, on a class basis. You should go to this link to access the information made available. 

The paper has just been released, so requires some time to review and consider, but at first glance we note the limits on robo-advice for insurance purposes, explained by "...concerns that these products can sometimes not be easily exited, and the consequences of failing to disclose material information are high..." Insurance advisers could probably take this as a back-handed compliment: once upon a time insurance was a 'category two' product not worthy of the supervision accorded investment advice, today it is investment advice which may be automated, and insurance that requires a human to execute. Having said that, those of us that work with technology know that robots are better at capturing complex information and ensuring that it is always acted-upon than humans are. We think that the FMA should take into account Jacqui Dean's proposals to reform disclosure laws, and the capabilities of insurance advice systems, when considering this issue. 

Face-to-face social interaction leads to a longer life...

Face-to-face social interaction leads to a longer life - and probably more sales, but let's not worry about that just yet. Remember, nobody cares how much you know, until they know how much you care. So I would like to quote this from @gapingvoid in full - but you should go to their site (see the first link) and visit them. 

Face-to-face social interaction leads to a longer life

This was one of the most important takeaways from April’s international TED conference: that there is no replacement for being in the same room as someone you love.

We need to let ourselves free from our devices. We need to re-teach ourselves how to interact with each other. FaceTime isn’t enough. Whatsapp isn’t enough. Emails aren’t enough.

Spending time with the people you love is the only thing that will make you feel human again.

Being a human being: that’s enough.

So, please go visit these clever, talented people. 

FSC Launches New Industry Awards

The FSC has launched their own industry awards - showcasing innovation, excellence and consumer-focus with the following award categories outlined below.

 

Accuro Buy Now

Advisers with an Accuro agency now have the ability to complete a fully underwritten application through Quotemonster by selecting the 'Select' button circled below. Advisers then have the ability to select from a wider range of options specific to Accuro.

Click here to learn more about the process.

Recent Product Updates

We have just uploaded the Quality Product Research Limited database QPRV10.1 to Quotemonster and subscribers. This version included the following changes:

ANZ Trauma Cover:

Policy wording also updated to the most recent document in the database, standalone cover.

ASB Mortgage Protection Review:

Review & change made to Offsets / Mental Health Limitation / Partial Disability provisions

Asteron Life

Enhancements of Trauma, TPD & Mortgage Protection for Business and Personal  products (effective 19 June 2017)

Kiwibank Mortgage Protection Cover:

Product has been rated & policy wording uploaded to database

Westpac Trauma (accelerated only)

New score added under ‘Diagnosis & Partial benefit’ to capture ‘minor heart attack’

Sovereign Critical Illness 

Updated pricing is being tested and will be applied to Quotemonster by tomorrow morning. The policy wording for these product enhancements has not yet been reviewed and will be reviewed and updated by 26 June, the QPR database will be updated again during that week. 

 

 

Hannah McQueen Seminar Series

Hannah McQueen is hosting a number of "Creating Financially Independent Kids" seminars around the country. Partners Life are the key sponsor for the event - you can find out more details here. 

Worried about war, riot, terrorism, and civil insurrection?

Many insurers seem to be worried about those things, but the best of them don't bother excluding them any more. You can find out which on Quotemonster. But if you are interested in risks, then you might want to flick through the following presentation (it is only 18 slides, about a five minute read, assuming you don't read all their sources). Anyway, this comes from the talented folk at ourworldindata.org and you should visit them - hint, click here. 

Unconscious bias and what to do about it

Unconscious bias is probably costing you money. Three processes will be responsible for most of the damage: marketing, face-to-face sales, and hiring people. For a crash course in how bias operates, even while it keeps itself hidden, I recommend the book Thinking Fast and Slow by Daniel Kahnemann. Reducing bias mostly boils down to process. Choosing to prefer measurable differences between candidates and clients, or to match known demographics, rather than go on 'feel' or 'instinct'. I don't know how many times I have been told that such-and-such an ethnic group doesn't buy much insurance, yet when studies compare groups of buyers, the differences in rate of actual  purchase are inconsequential. Choosing to run interviews only based on structured questions and in-box exercises are another antidote, and yet the unstructured interview and still dominates the process. It is hard changing, we use in-box exercises for hiring at Chatswood, and have done for QPR, but it is hard to convince colleagues to do so, and backsliding is easy when you are busy. Here is a link to some tips for the hiring process. 

How common is a drop in income?

We are often asked how common a drop in income is - because it helps inform the decision between Agreed Value, Loss of Earnings, and Indemnity income protection insurance. Well, it's quite common. Radio New Zealand has this piece which states that s sharp fall in income is about a 1 in 9 chance per year for most people, but for middle income, and low income earners that rises to 1 in 6. That's a substantial risk. Thanks to Jeremy Bernstein for picking up on this one. Link. 

Information for clients: a good basic guide to chemotherapy

Part of every adviser's toolkit should be good basic information for clients. Here's a guide to chemotherapy produced by the NZ Herald. Link. 

Shifting Gears Event on Personalization of Insurance Product

Shifting Gears has a good profile of its recent event examining personalization of product at this link
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Personalization based on data collected by internet of things (IoT) devices is likely to be a growing trend, and yet mostly insurers response to such opportunities has been slow, or limited to the impact of behaviour on pricing. Montoux, the suppliers of life insurance product development modeling and analytical software, sponsored the events. 

FSC: AIA has re-joined the Financial Services Council

Congratulations to Richard Klipin and AIA for a return to the FSC. More details at this link. We hope that the benefits of collective action, where that is possible will be realised. There are many areas which require collective approaches. One is setting the rules of the industry, so it is good to have, essentially, the whole industry co-operating in discussing law and regulation changes with the various agencies responsible. Another is public relations, and for insurance, it is important to retain the right of insurers to inderwrite cases, load, and defer, where they need to do so - a battle being fought in countless articles about underwriting and claims right now. 

Travel Insurance Fright After Fall

A Kiwi woman with prosthetic limbs on both legs had a fall while travelling around Europe, one of her legs was damaged. The estimated cost for repair was estimated at around $3,000 but Southern Cross told her “her prosthesis is only covered to $1500 — it’s considered baggage and we had not declared it as a specified item”. The case was taken to Fair Go as Fuhrer's mother said the prosthetic legs were declared as specified items and that they were not "baggage". Click here to read more.

Cyber Security Overview

A good overview by insurance advisers BRAVEday on cyber security. Link. 

Assumptions Guide to Projecting Premiums

We've been working on how to project premiums in Quotemonster - soon you will be able to do this in Head to Head. Here is a sneak preview of our assumptions when projecting premiums.

Estimates of future premiums are just that – estimates – and are subject to assumptions about numerous factors. Insurers each have different approaches to illustrating what future premiums might be. We have had to create our own approach so that we can standardise and allow a measure of comparison between insurers. They are just an indication of how the rate for your cover is likely to change over time. You can review a full list of the factors that can potentially affect your future premiums, and how we treat them to arrive at our estimates below.

Infographic: Visual Vocabulary

The Financial Times has an excellent info graphic on the best data visualisations for different situations. We love data, and data visualisation here and so, we love this. You can download a high resolution version at the link above.

Southern Cross and ACC scrap over Liability

Southern Cross set up a team of specialists ten years ago because they believed that ACC was wrongly turning down legitimate claims by policyholders, leaving the Southern Cross to pay the cost of treating them. 'The insurer said it scrutinised around 200 cases a month where policyholders had had claims declined, usually older people whose injuries ACC concluded were wholly or substantially caused not by their accidents, but by underlying medical conditions. Usually age-related degenerative conditions.' Click here to read more from Rob Stock. The emphasis was added by me, that is a very large number of claims - something like 24,000 claims since the team was set up by Southern Cross. 

You should read the whole article. There is a wealth of claims data on the number of claims that were subject to some sort of dispute, the number of decisions changed, and the amount of money that is at stake. $4.95 million in payments made by ACC to Southern Cross in the year to June 2016. More than that, is the extent of the process Southern Cross engages in.