FSC are hosting their annual conference in Auckland on the 7th and 8th of September 2017. They will be partnering with Workplace Savings NZ to deliver ‘Navigating Change’. More details are to be released shortly.
We have recently done a number of updates to QPR including OnePath's recent changes to Trauma effective 12th of April. There were score changes to a number of items in Trauma including Heart Attack, Rheumatoid Arthritis and Child Benefit.
There have also been some score revisions to Trauma for Fidelity Life, Partners Life and Westpac.
Indeed, we all like clients. But specifically, Strategi likes the word 'client' preferring it to 'customer'. I agree, and many others do too, so why the particular interest in this statement. Well, here at Chatswood we like data, and Strategi took the trouble to identify which laws, regulations, and authorities choose which word. Link.
The Australian FSC has announced a draft approved provider standard. While the draft standard has been getting quite a lot of flak from advisers, it contains quite a lot to commend it.
First, the flak: Trowbridge requirements were landed in full on advisers, but the recommendation to have APLs that included at least half the industry have not appeared in the draft standard, feeding the impression that hard rules can be applied to advisers, but not corporate Australia. Simon Swanson, CEO of Clearview, and formerly CEO of Sovereign, here in New Zealand, described the draft standard as a wasted opportunity.
But there is good in the standard. As a shareholder in a research provider I cannot help to be excited at the idea of similar standards being required here. Take this summary section: "It is envisaged the Life Insurance APL will have regard to:
Claims and underwriting philosophy of providers
Product features, benefits and consumer value for money
From what? The number of RFAs is genuinely hard to work out. The register is a mess 17,000 plus entries and rising. Because it is so simple (and relatively inexpensive) to register, lots of people do it. Most of these entries do not represent a person that gives advice. As quotemonster provides a useful free service to most RFAs that sell insurance we have a lot registered, but we have spent a lot of time weeding out 'dead' accounts, and we continue to see plenty of new registrations. Few will become successful advisers.
Do they all give advice? A significant number of people register as advisers and yet do not give advice. If you run a business which is, in fact, sales-only, there was still an advantage to register, as it reduced the risk and consequences should the person accidentally give advice. If RFA numbers fall that does not immediately mean that the number of advisers - meaning people actually giving advice - will fall.
How productive are they? It seems clear to us that most life insurance business is handled by the top 2,000 advisers, of which some 200 or so are AFAs. I expect the pattern to be little different for general insurance and home loans. A fall in the number of advisers does not equate to a fall in advice being given.
To what? Although the category 'RFA' will disappear, the people no longer in that category may appear in others. They may become FAs, or FARs, or they may sell but not give advice, as well as leaving the industry.
Of course, I am concerned that the new regime will result in a reduction in the number of advisers, and share that with Michael Dowling. The interesting thing about the likely reduction in RFAs participating will be the answers to the questions above. But the presence of the questions also tells us something about the current regime.
Gen Re conducted a study from 136 life and health insurers in 23 countries to find out how big "big data" is in the industry.
"Regardless of obstacles to overcome, it is apparent that insurance companies are seriously looking at the usefulness of predictive analytics. If plans stay on track, over the next two years the industry is set to experience considerable growth in this area and undergo significant changes. We’re continuing to monitor trends - and are focused on solutions that will help further the successful use of analytics and applications for insurance."
Click here to read the article and view some of the results.
We understand that for some of our clients the recent floods in the North Island have caused much distress and uncertainty. We are committed to supporting clients in any way we can and will be offering them the ability to suspend their premiums for three months during this difficult time.
Premium Suspension Offer OnePath clients, who experience financial hardship as a direct result of the recent flooding events, will be able to apply to suspend their premiums for three months across all of our policy types (even if they do not have Premium Cover as part of their insurance). They will continue to be fully covered over this period. Clients can apply for this premium suspension which is available from Friday 7th April.
I use health tech, I am also in the life insurance industry. While I may connect heath wearables to the industry, most consumers don't. Heck, most of them don't think about their life insurance. That was part of the promise, that's the cherished 'peace of mind' we offered, so we shouldn't complaint too much. Also, tailoring life insurance products so that they connect to wearables is only urgent if it yields competitive advantage somehow. After all, it is still early days in the world of wearable health tech. That helps to put into context many of the general concerns about wearables which are always wheeled out as objections for their use by the insurance industry:
Not enough people use them
They aren't accurate enough
There isn't that much evidence that increasing activity improves risk
Ignore the first point, in time, either there will be enough or there won't in time and we'll move on.
The second point makes me laugh. Your bathroom scales aren't accurate either. For decades blood pressure measurements have been getting more accurate, but remain heavily dependent on how you do them. But they are so much more accurate than most answers given to the 'weight' question on life insurance applications. The kind of level of inaccuracy is similar to your speedometer in your car (well, most cars). Also, precision isn't needed here. The accuracy is broadly fit for purpose. People who watch their weight know that their bathroom scales are out, and measurement depends a lot on when you weigh yourself, and factors like with or without clothes and shoes. The game is to watch trends, not worry about individual data points. If the wobbly line keeps going up, I need to eat more greens and less cakes.
The third point focuses on the emblematic '10,000' steps. This was never much more than an advertising slogan, very few such devices track steps alone. They seek to 'gamify' the generally accepted contributors to good daily health by getting the user to track a basket of data: general activity, proper exercise, heart rate, sleep, weight, and more. The usual things. Track these over a long period of time and we get trends. Non-tracking tells us something. Even abandonment by the user tells us something. We can't be snobby about this data when, as an industry, we use BMI which is generally based on what the applicant self-reports as their height and weight.
What is interesting is whether this trend can be brought into product design in a meaningful way. That is a concept that we are still struggling with as an industry. Initial ideas, such as 'giving a discount' are a bit dumb. Most people can hardly remember what their insurance costs, until it gets really expensive, and then, the kind of discount available for this activity, is nowhere near enough to make a difference.
If any form of connection to wearables is to be worthwhile we have to come up with better ways to connect the idea of your daily health activities with your lifelong risks. The core ideas that drive the health wearables market are alien to life insurers. Consider this: a committed user of a health app will interact with it more in one day than they will with their life or income protection product in a whole year. People who can make weighing yourself that interesting may have something to teach us. We should try to learn.
The Economist have produced a chart showing the cities with the highest homicide rates - the majority of them are in Latin America. Which prompts a question: which kills more people each year, murder or war? You know the answer when you think about it. But the really disturbing thing is that some countries have got murder rates that are so much lower than others (even when you choose countries of similar wealth) ... so we already know how to fix this. While murder seems so individual and small scale the world of risk and big data suddenly makes it look like something else: both reasonably predictable, and reasonably preventable. When something like that is permitted to go on then more questions should be asked, and more done to stop it.
According to this article on FT.com filling in endless forms to buy a new policy may become a thing of the past. It appears that many of the big overseas insurers are heavily investing into innovation and research, it is likely how we buy and what we buy will differ significantly in the future.
If you have not got a level five qualification you may be forgiven for some confusion. Some people advise that you should hurry up and get it, others say wait and see. If you don't want to pick through the technical arguments, try this one instead:
It depends on your attitude to training. If you think that all the training in getting level five is going to add very little, then you may place more weight on the value of delay. But if you think that they training is likely to be valuable, then even if the precise requirements change and you have to do some more training again later, you will get value, so go ahead, do level five.
Susan Edmunds asked us to investigate which companies will allow stand-alone medical policies for children. We hadn't thought of this use case before, but logically, it is useful. What if the parents are unable to buy health cover - perhaps they are un-insurable, or simply cannot afford it, or this is a case of a child being raised by an elderly grandparent? We checked around: apparently two insurers offer the cover without requiring an adult life to be part of the policy. Accuro and Sovereign.