Life Insurance in the Digital Age: It Would be a Good Idea

5. February 2016 08:11 by Kelly in   //  Tags:   //   Comments (0)

Swiss Re's report on life insurance in the digital age includes many gems, you can find it at this link - do read it. Some highlights include: 

  • Just how much the life industry lags behind others in satisfaction scores compared to other industries around deployment of digital technology
  • The importance of collecting good data throughout the business and using that well. Insurance has collected richer data than most other industries and yet few use less in an effort to create better customer engagement than we do. 
  • But in other area it seems light: the poverty of ambition in the quoted examples of adopting automated underwriting systems is shown up by several much better systems I have seen recently. 

Fixed Term Life Cover Enables the Coverage of People with HIV in the United States

4. February 2016 08:34 by Kelly in   //  Tags:   //   Comments (0)

This article on LifeHealthPro website explains that last month Prudential Financial began offering 10 and 15 year term life insurance policies to people living with HIV.

This is interesting. Essentially these folk have figured out that in very many cases people treated with the current basket of retrovirals and other tricks can live a long time with HIV. What is even more interesting is that this approach could be used with all sorts of other forms of long-term, chronic, disorders that will probably shorten life, but can be managed for a long time. I wonder if this approach could be adopted more often in New Zealand if we did not have such a fixation on a product which is, in effect, renewable indefinitely - but actually held for much much shorter periods. By removing the right of renewal at a fixed and known point coverage can be issued for lots of people, and they can get on with their lives in the meantime. 

Crowdfunding is Not a Replacement for Life Insurance

3. February 2016 08:16 by Kelly in   //  Tags:   //   Comments (0)

Apparently creating a fundraising page to fund funerals or support family members after someone's death is becoming increasingly popular. The average amount raised on funeral, memorial and tribute pages on fundraising site GoFundMe is $2,200 USD.

"No Life Insurance, Help Spouse" is the headline on a current GoFundMe page set up after a woman's husband died while ziplining in Costa Rica, the page has currently raised $7,495 USD. Just think how even just $50,000 of life insurance would have made a huge difference to them - and it is typically available for less than a dollar a day. 

Click here to read more about the craze of crowdfunding and how although a few thousand dollars can help out surviving family it is well short of the kind of meaningful aid that would have been provided by a life insurance policy.

Southern Cross Announces Insurance Benefits Not Seen Before in NZ

2. February 2016 08:28 by Kelly in   //  Tags: , ,   //   Comments (0)

Southern Cross have recently made this announcement about new additions to their policies with a benefit not yet available in the country.

New Zealand’s largest health insurer Southern Cross is adding an allowance for prophylactic treatment and increasing the surgical claim limit on most of its plans.

Prophylactic or preventative treatment is treatment undertaken to prevent a disease or illness from occurring where there’s an identified high risk – recently made prominent by Angelina Jolie, who had her ovaries removed and a double mastectomy due to the BRCA1 gene mutation linked to breast and ovarian cancer.

Southern Cross Health Society is the first New Zealand insurer to offer this benefit as part of its plans.

Head of Product and Marketing, Chris Watney says, “Genetic testing can identify a person’s increased risk for developing a life-threatening condition and is changing the way people look at their health.

“If it’s highly likely a condition – such as breast cancer or ovarian cancer – will develop, prophylactic surgery can be recommended as the best course of action. We want to support members in this difficult decision and give them more options.”

The prophylactic benefit is a lifetime allowance that ranges from $30,000 to $50,000, depending on the member’s plan.

Gift of Knowledge, a national charity and support network for New Zealanders affected by hereditary breast and ovarian cancers, has called the new benefit a “big step forward in recognising prophylactic surgery can be life-saving”.

“Every day we see families deeply affected by illness and loss from these cancers. While prophylactic surgery is never an easy decision for anyone to make, we applaud Southern Cross for supporting their members and leading the way in offering this as an option,” says founder Nicola Coom.

Replacement of Insurance by No-Advice Sales

29. January 2016 08:07 by Kelly in   //  Tags:   //   Comments (0)

JP Hale has this excellent post on the risks of replacing a policy when you go and get a "no-advice" sale. This process is common, in effect, the new adviser says "I'm not advising on that other thing, just look at this and see if you like it". This is done with varying degrees of clarity, but must be happening on a large scale because we have both high levels of lapse and new business, persistent groups of the population that have no insurance and never have, and low reported rates of replacement business... not all of those numbers can be correct. Link. 

UK Star Economist to Tell NZ Industry Why Finance Needs to Come Back to Earth

28. January 2016 08:25 by Kelly in   //  Tags:   //   Comments (0)

As a guest of NZ's CFA Society UK economist and author John Kay will voice his harsh critique of the financial services industry. 

This article on Investment News NZ reads:

"Kay is booked for a two-hour CFA luncheon at Auckland’s elite hangout, The Northern Club, on February 11 to expound on his argument that the global financial services industry has grown too big for its boots.

The noted economist, author and Financial Times columnist put the case in his latest book, ‘Other people’s money’, that an oversized financial sector has “detached itself from ordinary business and everyday life”, according to promotional material.

“[Finance] has become an industry that mostly trades with itself, talks to itself, and judges itself by reference to standards which it has itself generated,” the publishing blurb says.

“And the outside world has itself adopted those standards, bailing out financial institutions that have failed all of us through greed and mismanagement.”

Jeffrey Stangl, CFA Society NZ president, said while Kay’s views might prove controversial they “dovetail” with the organisation’s agenda to lift standards across the industry.

“We invited [Kay] to stir the pot a bit, to get people thinking,” Stangl said.

“The CFA Society and Institute are all about creating a better-informed marketplace and thought-leadership for the financial community.”

For example, he said the CFA ‘Investor bill of rights’ chimes with Kay’s agenda to restore trust in the capital markets by raising ethical standards, transparency and consumer engagement.

“As part of that we’re promoting the ‘Investor First’ month in May this year,” Stangl said. “Change needs to start from the grass roots. “If investors demand more they have a great power to change the market.”

As well as his academic roles that include visiting Professor of Economics at the London School of Economics and a Fellow of St John’s College, Oxford, Kay is a director of a few listed companies.

Stangl said tickets were still available for Kay’s Northern Club gig, which seats a maximum of about 150. Professional continuing education credits are available for attending."

One in Five Lie to Their Doctor

27. January 2016 08:10 by Kelly in   //  Tags:   //   Comments (0)

Southern Cross have released the results of a survey taken out in November 2015 uncovering the truth about what people lie about to their Doctors.

"Do you smoke? How often do you drink? Do you exercise often? And how much do you spend on takeaways?

These are just some of the routine questions one in five Kiwis lie to their doctor about because they’re ashamed of their unhealthy lifestyle.

This startling stat was discovered during a recent Southern Cross Healthcare Group survey which showed that: 

  • 22% of people lie to their doctor
  • Of those who lied, 35% admitted they could be in better health
  • 33% didn’t want to own up to their bad behaviour
  • 30% were embarrassed or uncomfortable talking about their health issues
  • 25% were afraid of the response
  • 17% didn’t want to disclose personal information

Southern Cross Health Society head of clinical operations Geoff Searle says “If there’s one person you should be truthful to it’s your doctor.”

“You might think a white lie here and there won’t hurt, but it could seriously hurt your chances of a long and healthy life.”

The survey found that shame and embarrassment were the main factors stopping people from talking honestly and frankly with their doctors.

Lying about your exercise levels, how much you drink or smoke,  or deliberately omitting some of your medical or family history  will limit your doctor’s ability to give you the best health treatment, advice and to screen appropriately for a number of problems, says Taradale Medical GP Dr Mark Peterson.

“Doctors with a bit of experience are not going to be shocked or embarrassed by a patient’s admissions about their lifestyle - we have come across most things before. It is much better to be upfront to begin with because the truth usually comes out in the end,” says Peterson.

“Our Code of Ethics means that anything you disclose to your doctor will remain confidential and will only be shared with other health professionals with your permission.

“What’s important is putting aside any embarrassment and being  honest about your health – this is the only way to make sure you’ll get the timely advice and treatment you need.”


Editor notes:

The Southern Cross survey was conducted by TNS online amongst 2002 randomly selected New Zealanders and was carried out in November 2015. Responses were weighted to be representative of the New Zealand over 15 population by age, gender and region.

Robo-Advice Opportunity, Definitions, and Where it Fits in Your Plans

26. January 2016 08:09 by Kelly in   //  Tags:   //   Comments (0)

Susan Edmunds at Goodreturns quotes David Boyle, Group Manager of investor education at the Commission for Financial Capability 

"...roboadvice was a potential starting point for people who did not know how to engage with financial advice, and who were not ready for a personalised advice service from an adviser"

This reminds us to offer a helpful set of definitions to advisers seeking to add some form of robo-advice to their offer over the coming year. 

  • You can offer Robo - "near advice" essentially you can fully automate a buying process which includes lots of good information but without giving any any advice, or maybe just giving what is currently class advice. 
  • You can offer "Near-robo" advice. This means using lots of online tools to help a client qualify themselves to enter the personalised advice process, but which is completed by a human. 

Advisers should be investing heavily in the development and provision of the latter kind of service. The only service which should require special regulation is true robo-advice - where personalised financial advice is completed entirely without a human reviewing it. This kind of process is going to be expensive, and for many market segments in New Zealand it will simply not be economic. Having said that, the key issues will be: 

  • Clarity of the advice process - does the client know what is going on?
  • Scope of the advice process - it will probably need to be limited, can you safely limit it and ensure the client understand that?
  • Literacy - asking questions online is all very well, but you may miss out on cues which tell you that the client doesn't really understand the question. So literacy cues and tests are going to be crucial
  • Extensive swim-laning - so you can help clients that need a service different to the full online process. 

Robo-Advice Versus a "Purpose-based" Approach

25. January 2016 08:02 by Kelly in   //  Tags:   //   Comments (0)

This article on Producers Web by Bob Clark discusses his predictions for the coming year based on the growth of automated online advisory platforms (robo-advisers) int he industry. 

Clark writes"While some “robos” still augment their revenues by referring users who want financial planning or other personalized financial advice to brokers, a growing number of them are discovering the greater profit potential of adding automated financial planning to their service menus. 

I think most of us an agree that, so far anyway, “automated” financial planning platforms fall far short of the personalized services offered by today’s human financial planners. Yet as Amazon and the Internet itself have done to retail merchants, robo financial planners will change the conversation, and force human planners to articulate their value proposition beyond simply “having a financial plan,” which has resonated with clients — until now."

Clark outlines The Purpose Based Financial Planning approach is centered around these five steps for client engagements:


  1. Exploring
  2. Engaging
  3. Envisioning
  4. Enlightening
  5. Empowering


Southern Cross: In Denial About Our Sweet Tooth

21. January 2016 08:23 by Kelly in   //  Tags:   //   Comments (0)

Here is the latest press release from Southern Cross:

Kiwis are in denial about their sugar habit and quick to criticise others, according to research by Southern Cross Healthcare Group.

A recent survey of over 2000 New Zealanders showed a vast difference between the amount of sugar people believe they consume daily, and how much they think others eat.

This is despite research from last year showing that 63% of respondents believe they consume too much sugar, and 73% believe it’s a cause of the country’s obesity problems.

The 2015 survey showed that:

  • 41% believe they consume less than 5 teaspoons of sugar per day – less than what is found in one cup of orange juice.
  • 24% believe the average New Zealander consumes between 10 and 14 teaspoons of sugar a day – between 8 to 10 teaspoons are commonly found in a can of fizzy drink.
  • 20% believe the average Kiwi gets through 15 to 19 teaspoons of sugar per day.
  • 17% believe the average Kiwi gets through 20 or more teaspoons of sugar per day.
  • Comparably, only 4% of Kiwis believe they consume 20+ teaspoons of sugar a day.

Nutrition Foundation nutritionist Sarah Hanrahan says Kiwis are clearly confused about what is in the food they eat – and are paying the price with weight gain.

“The 2008/09 Adult Nutrition survey showed that in reality New Zealanders consume between 24 – 30 teaspoons of sugar per day – which is way above these estimates. If only 4% of people think they’re eating this amount daily there’s a long way to go before we start to tackle our obesity problem.

“Sugars occurring naturally in foods like milk and fruit have valuable nutrients and aren’t the problem, it is the added sugars in processing causing concern. For many people a lot of added sugar in their diet comes from packaged foods, including cereals, soft drinks, sauces and snack foods. 

“Eating more wholefoods and cutting back on heavily processed foods can be a good step toward reducing sugar intake.”

Southern Cross Healthcare Group spokesperson Aimee Bourke says the health implications of a sugar-heavy diet are dire.

“New Zealand as a country is getting fatter - one in four Kiwis have a BMI that categorises them as obese.  At the same time we’re seeing a rise in chronic conditions such as diabetes, stroke, cancer, heart disease, and excess sugar intake is linked to all these.”


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