The value the government places on your life - and what it means

Jonathan Milne, writing for Newsroom, has an excellent article that works through the history of the price that government places on a life - It is called VOSL, the Value of Statistical Life. This is the price the government uses for investment decisions, for example, about road funding - anything where lost lives avoided is going to be a major factor in the funding case. The article provides excellent insight into the formulation, and what it means when comparing what we spend on road, PHARMAC, and other programmes. It is currently $4.53 million. Link: https://www.newsroom.co.nz/transport/government-valued-your-life-at-46m-until-covid


FSC Get in Shape Conference

The FSC Get in Shape Conference is just around the corner and we thought it was a good time to highlight what to expect if attending. The conferences will be held in Wellington, Auckland, Christchurch and Dunedin. The FSC has ensured relevant topics are discussed by industry leaders in the sessions and Masterclass. Highlights of the conference include:

  • Meet and engage with the leaders shaping our sector and regulatory landscape. These include Leaders from the MBIE, the FMA, the CFFC and the financial advisory sector.
  • Consumer focus - We will unpack the latest research from across the NZ and the globe  and understand how Financial Advice is helping Kiwis lead better lives.
  • Engage with Leading legal minds at the Masterclass - The masterclass is curated by those that understand what it really means to succeed under the new regulation. Our line up of legal experts and leading advisers will be run in a practical workshop style to have you thinking outside the box and teach you how to best use resources available to you.
  • Connect  and network with your colleagues - After a very tough 2020, join your colleagues for a morning of learning, engaging and getting inspired for the year ahead.
  •  Meet  you in the market place – Once again our marketplace expo is the meeting place to connect with your suppliers and partners.
  • CPD -  Get your CPD & learning program off to a strong start for 2021. All sessions will be assessed and all attendees will receive CPD certificates for sessions attended. 

Those interested in attending can register here and find the dates and location below.

WELLINGTON
Wednesday, 10 February 2021
Arrival from 7:15am, welcome at 8:00am, advice summit close 12:45 followed by Masterclass from 1.15pm until 3.15pm

Members Gallery
Sky Stadium
105 Waterloo Quay
Pipitea,
Wellington 6140

AUCKLAND
Thursday, 11 February 2021
Arrival from 7:15am, welcome at 8:00am, advice summit close 12:45 followed by Masterclass from 1.15pm until 3.15pm

North Level 5 Lounge
Eden Park Function Centre
10 Reimers Ave
Kingsland
Auckland 1024

CHRISTCHURCH
Wednesday, 17 February 2021
Arrival from 7:15am, welcome at 8:00am, advice summit close 12:45 followed by Masterclass from 1.15pm until 3.15pm

Tait Technology Centre
245 Wooldridge Road
Harewood
Christchurch 8051

DUNEDIN
Thursday, 18 February 2019
Arrival from 10:00am, welcome at 10:30am, close 3.00pm followed by Masterclass from 3.15pm until 5.15pm

Dunedin Centre
1 Harrop Street
Dunedin 9016

Get In Shape 2021 Big Banner v1 - Financial Services Council


FADC rules adviser in breach of code standard, and more daily news

The Financial Advisers Disciplinary Committee (FADC) has concluded that an adviser breached the Code of Professional Conduct for Authorised Financial Advisers. The case was brought forward by the FMA after it begun an investigation on the adviser on 23 August 2019. The adviser, who has name suppression, operated under three different businesses offering financial advice, financial planning, investments, mortgage broking, KiwiSaver, retirement planning, residential property management, and personal and small business tax advice services. Through the FMA investigation, it was found that there were three breaches of Code Standard 15. The breaches were in relation to financial advice, personalised services, and client relationship management provided to three clients. Advisers looking to ensure that their advice processes are up to standard would benefit from our Advice Process Management service.

“The Financial Advisers Disciplinary Committee (FADC) has today published its decision regarding a case brought by the FMA. The case relates to alleged breaches of the Code of Professional Conduct for Authorised Financial Advisers.

It says that "this is a case about breaches of the Code". It is not about the integrity of the financial adviser. "There is no suggestion that she has improperly benefited at the expense of her clients, or that any client has been disadvantaged."

"But, the provisions of the Code are fundamental and adherence to them is always required."

The financial adviser still has interim name suppression, but the decision says she registered as an AFA on the FSPR in 2011. She offers a range of services including financial advice, financial planning, investments, mortgage broking, KiwiSaver, retirement planning, residential property management and personal and small business tax advice (as a tax agent) through her business. She trades under three businesses, one of which is registered on the FSPR from 2011 as an employer or principal of a financial adviser and/or Qualifying Financial Entity.

After an unrelated complaint in January 2018, the FMA took an interest in the AFA, which culminated in a monitoring visit to the premises in May 2019, and a desk based review in July 2019.

As a result of these two visits, the FMA began an investigation on August 23, 2019.

The investigation found that the AFA breached standards 12 and 15 of the Code, which relate to keeping information about personalised services for retail clients, and the requirement to have an adequate knowledge of Code, Act and laws.

The court briefing says that "The breaches are established in respect of three clients, whose identities are permanently suppressed; it consists of the adviser having failed:

  1. to record in writing adequate information about a personalised service provided to a retail client
  2. to demonstrate adequate knowledge of the relevant legislative obligations which result from the term ‘personalised service’."” Click here to read more

In other news

Cigna: Multi-benefit discount offer on Assurance Extra products extended to 28 February 2021

Cigna: Karen Ward appointed as Head of Claims

Cigna: Nicci Johnston appointed as Head of Customer Care

Financial Advice: Ready, Set, Go webinars to begin 27 January 2021

Financial Advice: Trusted Adviser mark to be publicly launched 15 February 2021


Numbers are numbing - it is stories that get us, and our clients, to make good choices

I am not thrilled with checking on COVID-19 numbers. You have probably done this quite a bit over the last year. It is hard to believe that at this date last year was the first point at which human to human transmission was confirmed by a Chinese scientist. There would still be weeks before it became clear that this was going to be a global pandemic, and it was not until the end of March that we realised how bad, and therefore how serious the response would need to be. Things changed rapidly. Throughout that period I have checked various statistics sites, built models, talked with insurers about impacts, reinsurers, and gathered information that is relevant to the sector. I am not exactly sick of it, but the grim reality does weigh one down.

But these are merely numbers. I know, of course, that each number is a precious life lost. Even for many of the survivors there are very long-lasting effects. But the numbers never quite make it real, in some way, they overwhelm. This is a lot like using statistics to try and convince a young couple that they might need insurance. It is simply too hard to see themselves as one of those numbers. It is the emotional pull of real life that brings the issues home to me:

In March last year, my first experience of a friend with Covid-19: they flew back from the United States sitting next to someone on the plane 'who coughed a bit' - a few days after landing here, in isolation, they found they had Covid-19. That was months ago, she still has difficulty walking any significant distance. 

A distant relative, elderly, hospitalised during the first wave in the UK, caught Covid-19, and impressively, at 98, survived. My father does volunteer work collecting food for his church to distribute through their food bank. It is a great job to have in retirement. He's in his late 70s and still collects - even though it isn't safe, really, for him to do so. Three of his friends have had Covid-19 - fortunately they all survived. A friend in the church, her son who worked in Spain was critically ill - fortunately he survived. 

But so many don't live through it. You can see accounts of lots of people. Check out the BBC website. But again, more directly: last night I was on a zoom call which largely hosted people in the UK. There were 88 people on the call. Two who spoke had family members die in the last week. One woman's mother died during the week from Covid-19. One man lost his best friend 'choked to death' he said by Covid-19. Both in the last week. 

 

 


Legal and regulatory update for the life and health insurance sector

18 Jan 2021 – FMA released consultation on the Review of the Wholesale Investor Exclusion $750,000 Minimum Investment Exemption, with submissions closing on 26 Feb 2021. https://www.fma.govt.nz/compliance/consultation/consultation-paper-review-of-the-wholesale-investor-exclusion-750000-minimum-investment-exemption/


The essentials for overcoming future catastrophes, and more daily news

Diana Clement wrote a NZ Herald article on the need for being prepared in case of unexpected circumstances. Clement highlights that we need to be mentally prepared for the occurrence of personal or societal catastrophes. Clement continues by noting that getting out of debt and having savings is essential to overcome future crises. The need for budgets is highlighted by using the events surrounding COVID-19. Steve Morris, a financial adviser at SW Morris & Associates notes that we would all benefit from using digital tools such as free digital tools for personal cashflow forecasting such as PocketSmith. Insurance is highlighted as being another essential thing for New Zealanders to have in place to ensure protection. Income protection, mortgage protection, trauma/critical illness, permanent disability, business interruption, medical, and life insurance are all mentioned, with Clement saying each offers different types of cover that are useful in different circumstances. Although insurance is deemed as essential, Clement concludes by saying that no insurance policy is completely fool proof.

“My usual New Year articles are all about the positive stuff and how you can turn your year around. But after 2020, let's talk about preparedness. That includes being mentally prepared for curved balls, having savings, and taking out insurance.

Mental preparedness. Do you have a plan for the next time the world turns to custard? Unpredictable (black swan) events such as the Global Financial Crisis and now pandemic, hit us every 10 years or so. We can have personal black swan events such as divorce, or illness. Financial adviser Steve Morris of SW Morris & Associates has seen an upswing in couples separating after lockdown. This can be financially crippling. He recommends getting help from organisations such as The Parenting Place before the relationship ends up on the rocks.

Savings. Getting out of debt and building up some savings is essential if you want to ride out the next financial crisis. If you're constantly a few weeks from financial meltdown then this applies to you. It's hard, but you need to change your thinking and create a budget. People can and do turn their finances around. Use Covid-19 as the financial catalyst to get you started.

In an ideal world you need three to six months living costs (not income) squirrelled away. Providing you are still able to work and willing, most people will find a job within that period.

The best tool for this is a budget. I know it sounds boring, but it's simple to write your first budget and the outcome can be truly life-changing. I follow a number of investing and get out of debt forums and see ordinary Kiwis celebrating cutting up their last credit card or beginning an emergency fund. Don't write it off. It can happen.

Morris also recommends using the free digital tools for personal cashflow forecasting from PocketSmith.

Insurance. The whole point of insurance is to cover yourself financially when unexpected events hit. That's insurance cover for your health, income, and property.

A variety of insurances can cover your income/outgoings. They include income/mortgage protection, trauma/critical illness, permanent disability, business interruption, medical, and life insurance (which often pays out if you're diagnosed with a terminal illness. Each covers different risks and it's a good idea to seek advice from a financial adviser. Everyone is covered by ACC for accidents, but you're more likely to become disabled by illness, and only qualify for Work & Income benefits if you don't have insurance. When insuring yourself, make sure you think about the non-working or lower-earning partner, says Morris. All too often a higher-earning spouse has to reduce hours to pick up parenting duties if the other spouse becomes ill, is disabled, or dies, says Morris. Trauma cover is very good in this situation because it usually pays a lump sum, he says.

Insurance is essential in our modern world, but no insurance policy is 100 per cent foolproof. Because the things you will claim on are unexpected, they could fall outside the policy wording.” Click here to read more

In other news

Partners Life: Expressions of interest for February virtual New Adviser Training Course open

FSCL: FSCL warns investors to beware of cryptocurrency scams


Do media hate insurance or love it?

Although it might appear that journalists love to bash insurers, it is easy to forget that there is some surprisingly useful coverage:

Last year the high-profile owner, Gabrielle Mullins of the Auckland performance venue The Powerstation, died of cancer. She was fundraising to pay for Keytruda, a chemotherapy drug not yet funded by Pharmac. https://www.stuff.co.nz/entertainment/music/122701023/gabrielle-mullins-the-owner-of-aucklands-powerstation-venue-dies-of-cancer. Earlier this year Michael Kooge, a radio show host, also hit the headlines with his cancer story, saying "It's all pretty unlucky, if I had medical insurance when I was in my early 20s, before I got sick, I would be able to get this treatment covered, but because I didn't I'm being left to die.” At the same time Stuff linked to coverage by Tim Fairbrother of Rival Wealth discussing which type of medical insurance would be best. https://www.stuff.co.nz/business/81385630/what-type-of-medical-insurance-works-for-you-will-depend-on-your-circumstances

Each story is a tragedy. Also, the insurance industry could hardly hope for better promotional coverage. I draw your attention to what is implicit the first article and explicit in the second: that an unfunded drug would have helped, and that insurance would have funded this. In stories like these, it seems, the media believe in insurance. At other times, it appears that they ignore the vast volume of claims paid and believe that insurers are solely focused on denying the payment of claims. Is the glass actually half full?


Partners Life sets off on transparency route, and more daily news

Partners Life has begun the process of becoming more transparent by publishing a timeline of key events that would be of interest to customers. This step comes after the announcement by Partners Life CEO Naomi Ballantyne and chairman Jim Minto in September. Partners Life has shared information that wasn’t previously made public by Partners Life or other New Zealand insurers. Partners Life says that it is happy to make this information public. Information shared include premium changes, claims ratios, awards and launches.

“In late September, you may have seen Naomi and our Chairman, Jim Minto, interviewed by the press talking about Partners Life’s plans to publish a whole bunch of information on our website in the name of transparency.

Since then, we have been working away, trying to figure out the best way to make this important information not only accessible, but readable and interesting to clients, advisers and regulators alike, and we are very pleased to let you know that we have today launched the ‘Timeline’ on our public website. The Timeline can be found here.

The Timeline narrates all of the customer-centric events that have occurred within Partners Life dating back to our launch, including yearly recaps of in-force business levels, claims paid vs. declined ratios, capital raised and financial strength history, every product related change since we launched in 2011 (both positive and restrictive), every premium rates change since 2011 along with other events which might of interest to a potential client (such as awards and new technology launches)

There is a huge amount of information contained within the Timeline, much of which has never been publicly made available by Life Insurers in the NZ market before – we are happy to make this information public, because we believe our performance over the last decade absolutely speaks for itself, and think that this information will be of great value to the general public, and to your clients in getting comfort around who Partners Life are, and what we believe in.”

In other news

Partners Life: Partners Life to sponsor Partners Life DUAL. Adviser (100% off) discount is CTS21PLIFEADVISER and client discount (50% off) is CTS21PLIFEPOLICY


Cigna’s Gail Costa reflects on 2020 events and responses, and more daily news

Cigna NZ CEO Gail Costa shared her views on the importance of being prepared for change and adapting to unexpected change. In her opinion piece, Costa mentions how proud she is of the resilience shown by advisers throughout the lockdown periods last year. Costa highlighted the common shift out of comfort zones for many advisers as well as the increased used of digital tools such as online applications and digital calls. Costa noted the continued use of Cigna’s digital application platform. Costa also noted that the pandemic pushed people to realise the importance of being protected, with advisers working to help people understand what covers they had in place and what protection they could get. 

“Last year has tested the resilience of us all. Despite its challenges we’ve worked together and continued to support our customers from our make-shift offices. On top of that we’ve home schooled, looked out for our loved ones and managed stresses, whether that be in our work or personal lives.

 

I’m proud of the resilience shown by the adviser community who quickly adopted to new ways of working to ensure our collective customers would be taken care of as they too grappled with the uncertainty of the pandemic. For many advisers, last year saw them step out of their comfort zones and embrace new ways of doing business.

 

From May to June we saw digital applications more than double and usage levels have remained consistent ever since. What also became apparent was that some advisers are now either completely using video calls in lieu of face-to-face appointments or they have at least become a major part of their sales process. This is great to see as keeping on top of changing technology will enable us to continue to meet the changing needs of New Zealanders.

 

The uncertainty of the pandemic saw increased awareness among New Zealanders about the importance of being protected. As people became increasingly concerned about potential impacts of the pandemic on their work and family lives, the critical role of advisers to help people understand what they were covered for and the options available to them was made clear. Countless service hours were put in by advisers during this time to ensure that their customers continued to be well protected and their new customers were getting the right cover to meet their needs.”

Costa concluded by saying that the engagement Cigna had with advisers has provided insights that will help further improve products. The change in core product pricing and the simplification of policy wordings are examples of the changes being made. 

“Our engagement with advisers throughout the year provided invaluable insight into where we can make enhancements to our products. As a result we’ve rolled out a number of changes including more sustainable pricing on our core products, enhancing our definitions to and we’ve started introducing plain English policy wording. It has been great to hear how this has been received and gives us confidence that we’re moving in the right direction.

As we look ahead to 2021, one premise underpins all of our plans, we’ll continue looking for new opportunities to ensure our product and service offering remains sustainable to protect the long-term needs of New Zealanders.” Click here to read more

In other news

Asteron Life: in the coming weeks Asteron Life is set to inform advisers about:

  • Consultation on the proposed new distribution agreements
  • Asteron Life product accreditation requirements
  • Confirmation of FAP licensing arrangements
  • Information to support in adviser complaints management processes

Partners Life: Partners Life Preparing for Stock Exchange Listing

FSCL: FSCL warns investors to beware of cryptocurrency scams


RBNZ addresses data breach, and more daily news

The Reserve Bank has announced that it will continue to respond to the external breach of an information sharing service. Adrian Orr has said that the RBNZ has contained the breach and is now working to understand the impact of the breach, this includes working with both domestic and international cyber security experts. It has been noted that the breach wasn’t an attack on RBNZ or other users of the information sharing service. RBNZ has said that it cannot offer more details at this time.

“The Reserve Bank of New Zealand – Te Pūtea Matua continues to respond with urgency to a breach of a third party file sharing service used to share information with external stakeholders.

Governor Adrian Orr says the breach is contained, but it will take time to determine the impact. The analysis of the potentially affected information is being done with pace and care.

“We are actively working with domestic and international cyber security experts and other relevant authorities as part of our investigation. This includes the GCSB’s National Cyber Security Centre which has been notified and is providing guidance and advice.”

“We have been advised by the third party provider that this wasn’t a specific attack on the Reserve Bank, and other users of the file sharing application were also compromised.”

“We recognise the public interest in this incident however we are not in a position to provide further details at this time.”

Providing any further details at this early stage could adversely affect the investigation and the steps being taken to mitigate the breach. The Reserve Bank will continue to work with affected stakeholders directly.” Click here to read more

In other news:

Partners Life: Braden McMahon announced as new participant in the Legacy Leavers video series

Fidelity Life: 9-month fixed term Senior Project Manager role advertised in December

Gen Re: Medical Underwriting Programme set to become digital from 1 March 2021

Montoux: Customer Delivery Lead (Life Insurtech) role advertised

Accuro: appointed Director role advertised


Lead generation website for sale

An adviser business has put up for sale a lead generation website. A lead generation website is offered for sale as the adviser running the site wishes to focus on their own region, not on serving clients nationally or running a referral business. This is a great opportunity for a national business with the skills to serve the self-employed market. Twenty leads a week are typical from the site. Handover support is offered so you can continue to get the best out of the opportunity. Contact me or my team for further information. 


nib views on financial advice, and more daily news

nib has said that members that receive financial advice are better off. In addition, nib CEO Rob Hennin noted that half of nib’s members join via financial advisers. Hennin credited nib’s view by highlighting the findings from an internal study which found that members with advisers have more financial certainty and more health benefits. Hennin used the findings of nib’s internal study and studies commissioned by the FSC to conclude that people who receive financial advice are better off, saying that people with financial advice experience an improvement to their overall health.

“Health insurer nib says it is “absolutely clear” that customers with insurance advisers end up better off, and says advisers have done an “extraordinary” job adapting to the challenges that have come with COVID-19, and multiple lockdowns.

According to nib New Zealand CEO Rob Hennin, approximately half of the insurer’s business currently comes through its adviser channel. He says its internal studies have been clear – customers with advisers have more financial certainty, and also see increased health benefits as a result.

“It’s absolutely clear from our research and the work the Financial Services Council has done that Kiwis who receive financial advice are better off,” Hennin told Insurance Business.

Hennin acknowledged the work advisers have done saying that their response to COVID-19 was extraordinary. Hennin mentioned the increased use of digital tools and other methods to reach and assist clients.

“Advisers have just pivoted and done an extraordinary job throughout COVID-19,” Hennin added.

“They’ve really embraced digital tools and they’ve gone out, consulted with their clients and done whatever they can to ensure they all have access to the care and protection that they need.”” Click here to read more

In other news

Southern Cross: Insurer promises to “build momentum” and enhance products at AGM

AIA: Belief in oneself key to empowering women


Planning for 2021: how optimistic are you? Why?

In planning for 2021 I found myself researching optimism as an approach to checking assumptions about the future. Why? The Insurance industry has had some pretty awful quarters in terms of production - yet we know some fundamentals about the sector are strong. Is this a bad patch, and if so, when will the recovery begin? Or is this something more persistent, and if so, can anything be done?

Before I tell you my views, let me share a good question. Not my own, but based on some research about examining possible futures, which I will adapt as: "It is helpful to make a distinction between our outlook on the underlying course of events and our ability to influence them."

Some pretty big divergences between views can be traced back to either a perception of the underlying conditions and likely outcomes based on those and also whether we believe anything can be done about them. When separated out it can help to explain a lot of conflicts: the big differences in views between new and old insurers, also some big differences in views between dealer groups, between older advisers and newer advisers, and finally between many advisers and insurers. It all depends on where you stand.

More work on this will come in the next quarterly life and health report - due at the end of March. Inspired by the work of Peter Hayward and Stuart Candy, published in 2020 as The Polak Game. 


Legal and regulatory update for the life and health insurance sector

10 Jan 2020 – RBNZ announced that it is responding with urgency to a breach of one of its data systems. A third-party file sharing service used by the Bank to share and store some sensitive information, has been illegally accessed. https://www.rbnz.govt.nz/news/2021/01/reserve-bank-responding-to-illegal-breach-of-data-system

6 Jan 2021 – Police Financial Intelligence Unit released the November 2020 Suspicious Activity Report. https://www.police.govt.nz/sites/default/files/publications/fiu-monthly-report-nov-2020.pdf


Covid-19 Management and Vaccination Rates

How is the world doing managing COVID-19 and its effects? This time, a story in just two parts: infection rates per million of people, and progress on vaccination: 

First, infection rates per million. I think it is pretty clear that there are three groups in this chart. Those with awful records of infection control (UK, US, Netherlands, and historically, Spain and Italy) those with middling records (Canada, Germany), and lastly those with a great record: Australia, Taiwan, South Korea, and arguably best among them: New Zealand.

Then to vaccination. There are some leaders. One of the UK's weaknesses in infection control (an obsession with Brexit) is suggested as a strength in early approval and distribution of the vaccine. The National Health Service also provides a strong infrastructure for a vaccination effort - everyone has a record, there is a clear national programme for vaccination, and so on. But it is very early in the whole process - note the scale and that even leaders in vaccination are only at about 2% of the population - and even if you add the vaccinatin rate to the proportion of the population that have had Covid-19, they are a long way from herd immunity. That leaves 'room' for death rates to soar unless infection is controlled. Hence the return to lockdown in the UK. The real effect of vaccination won't be felt until over about 70% of the population has received a vaccine - including a booster shot. If you want to see who is closest to that, check out the interactive controls in the chart below. While vaccination offers hope for a way out of this mess, infection control is likely to be the more important public health measure until much later in 2021.


Clear fee disclosure prevents this problem:

Susan Edmunds, reporting at Stuff.co.nz, tells us of a client that was surprised by the extent of the fee a mortgage broker charged when they refinanced their loan early. They complained about it to FSCL, here is the essence of their decision: 

FSCL said the adviser was entitled to a fee but the terms of engagement were too vague to be enforceable. “The clause did not set out how much the clawback fee could be, or how the fee would be calculated. It simply said that, if the client fully repaid their loan within 24 months, the adviser would be entitled to charge an early repayment fee. For all [the client] knew, it could be a $25 fee, as opposed to $2500.” 

Faced with that, the adviser agreed to waive the fee. That's the problem with a vague disclosure - a few examples could have made this really clear. Glen McLeod makes a robust defence of the right to charge such a fee - which I broadly agree with - I just think it should be really clear to a client what the fee will amount to. In the absence of good disclosure, the dispute resolution bodies will rule in the client's favour. I quite like the approach outlined by Bruce Patten, of LoanMarket, in the article. I believe that would stand up to a test such as this complaint. 

 


Your insurer would not be happy about this...

Finder.com.au, an Australian money site, has done some research on Kiwi attitudes towards insurance. This was about general insurance, but I did think it amazing: 

A nationally representative survey of 2,001 New Zealanders aged 18 and above found that 88% of Kiwis lock their door, leaving 12% who do not.  That’s equivalent to 218,880 households not taking necessary safety precautions and leaving themselves vulnerable to break-ins. 

The second most commonly used home protection is house and contents insurance with 64% of Kiwi households having an insurance policy. Rounding out the top three is having locks on windows (52%). 

Do you see what I see? I think it amazing that insurance is referred to a home protection method in the midst of a list about locking your house and having locks on windows. We, the industry, may be partly to blame for referring to insurance often as wealth protection, equally frequently abbreviated to 'protection'. But the problem I have is that it may be seen as an alternative to physically securing your home. That is an exemplar of 'moral hazard' - that people may take less care when the financial consequences of their actions are reduced. Do we see this in the way people treat their health? Put another way, is there any evidence that we would not?

Of course I don't think that there are lots of people rationally, consciously, deciding to eat too much, not put on sunscreen, and undertake hazardous activities because they have insurance. It is a more subtle kind of pressure that is relieved. It is more like the way everyone drives a little faster when the road is wide and even than when it is narrow and has many corners.