Testing Policy Documents on Children

2. December 2016 08:21 by Kelly in   //  Tags:   //   Comments (0)

Sara Cobbett has written an interesting article on LinkedIn discussing the findings of a study which had 11 year-old's read and reflect on life insurance policy documents. That's right - testing policy documents on children, because this is the state of adult literacy: 

The UK's Skills for Life survey that out of adults aged 16-65 the following had poor literacy: 

  • 25.8% had literacy equivalent of GCSE grade D to G 
    [Translation / equivalent NCEA level one, age 16 equivalent qualification - not achieved, or failed English at School C if you are a little older]
  • 15% had literacy level around 11 year-old standard
  • 5% had literacy skills of a 5-7 year-old

That's a total of about 45% of the UK population. Reading ability comparisons are available, we reviewed several when we were designing readability scores, and the situation here in New Zealand is not very different. Sara Cobbett poses some good, challenging, questions about the design of policy documents, given that situation: 

Would you read 50 pages of text about a product you’re about to buy? How about 20 pages? Or even 10 pages? Lower than 10 - say 6?

A cynic in the consumer movement might say that documents of 50+ pages, lots of long words, and compound documents (requiring a reader to look at several parts of the document such as schedule, definitions of terms, definitions of conditions, and even separate documents) all add up to a very effective way of ensuring that consumers do not know what they are buying. I prefer to think that we just gradually got ourselves into this mess, with plenty of help from legislators and lawyers along the way, and we now need to sustain long-term effort to get ourselves out of it. 

The whole article is well worth a read. If you care about reducing complaints and improving the communication with your customers, whether you are an insurer writing policies, a financial adviser writing advice, or a direct marketer writing ad copy, you should read the whole article. Click here

Fit For Purpose Versus Ranking

30. November 2016 09:21 by Kelly in   //  Tags:   //   Comments (0)

For those people obsessed with the best, nothing will do but number one. But a focus on ranking can hide a multitude of problems, which is why Quality Product Research scores products, it doesn't rank them. Take these examples: 

Which would you prefer the number one product, or the number two? Well, in the absence of any other information, number one please! But what if the number one product was double the cost, but only a tiny bit better? 

So maybe now we're looking at second and third place, which shall we buy? Well, in the absence of any other information, number two please! But what if number two has one feature which is important to you but is worse much than the number three? 

So now maybe it's product number three... but actually it's within a half a percentage point of being the same as product number four, five, and six. 

Now what if one of those is slightly better for me, but not quite so good for my partner?

Like many purchase decisions, insurance has trade-offs. We haven't even begun to talk about service, customer preference, or other matters. The point is this - if picking your insurance product were as simple as taking the one which scores highest, you wouldn't need an adviser, and the robo-advice programming would be pretty easy. 

Accuro Offers Skin Cancer App to Members

28. November 2016 08:15 by Kelly in   //  Tags:   //   Comments (0)

Accuro have partnered with Skin-Vision, a Nethland-based app, which will enable its members to self-check for signs of skin cancer early on using their mobile phone. Click here to read more.

So how does Skin Vision work? You download it in your mobile phone, enter your details to create an account and then follow these three steps: 






Claim Declined for Forgetfulness - Illegal Acts Exclusion Case Study

24. November 2016 10:35 by Kelly in   //  Tags:   //   Comments (0)

We usually think of an illegal act as a crime or at least, an action the insured person took that was a breach of the law. The example we often give in workshops is that a person got drunk and drove their car. Most fully underwritten insurance will pay anyway - the best policies have no exclusions at all after an initial period. Some insurance policies decline to pay for illegal acts, but many people that take these policies out assume that because they are generally law abiding, these exclusions will not apply to them. 

We invite you to consider this case, that FSCL reports. A claim was declined under the illegal acts exclusion when a passenger in a car died because she had not put her seat-belt on. We are worried about this decision, because mere forgetfulness, especially on the road, could mean many claims arise from an 'illegal act'. The lack of clarity for consumers who may not realise that an illegal act includes, essentially, a mistake or forgetfulness, that means a breach of the road rules. Road accidents are a common cause of early death and many accidents resulting in the death of the insured may have been caused, or contributed to, by acts such as straying over the speed limit (however momentarily), drifting out of lane, or failing to take another look at an intersection - thereby failing to give way.

Illegal acts exclusions could represent a much bigger problem than most clients realise. 

Click here to see which four NZ insurers exclude unlawful acts. Create a report in Quotemonster to be able to show your clients the differences between products.

Quotemonster FAQs

23. November 2016 08:25 by Kelly in   //  Tags:   //   Comments (0)

Here are a list of commonly asked questions or queries about Quotemonster:

  1. The premiums don't match insurer quote software - be sure to check your Settings
  2. Can I get a copy of your posters? Find all three of them here
  3. I am unable to save my PDF report - follow these easy steps for a fix
  4. Why can't I see the banks? One of these suggestions should help
  5. Can I duplicate an existing quote? You sure can

We have recently developed a user manual full of useful information about all of the functions and tools available on Quotemonster - please do have a read through.

ASIC Claims Review: Quantifying the Value of Advice in Extra Claims Paid

21. November 2016 11:51 by Kelly in   //  Tags:   //   Comments (0)

Advice has a number of contributors to claim outcomes. Courtesy of ASIC, we now have data to quantify exactly how those help consumers at claim time compared to non-advised insurance. The data is in section 184 of the ASIC report - page 53. This is how it breaks down, by claim outcome:

Non-advised decline rate is 12%, compared to just 7% for advised channel claims. That is a huge variation: you are almost 70% more likely to have a claim declined in a non-advised channel product. Why is that? The chances are, its the product. Advisers do not sell the types of products that are commonly sold in non-advised channels. The differences will be mainly in pre-existing conditions exclusions and the absence of underwriting in many of these products. This is a valuable indication of the size of penalty that Quality Product Research Limited should consider when rating non-underwritten products. This may also be influenced by the adviser reviewing the potential claim, and pointing out when it really shouldn't be made.

Non-advised claim withdrawal rate is 11%, compared to 12% for advised channel claims. That gap is again bigger than it looks. The claims withdrawal rate could mean quite different things. An adviser may recommend putting in a marginal claim and withdraw it when it becomes obvious that it will not succeed. Or a client might make a claim and be talked out of it by an adviser - especially if the nature of the claim meant that it was, in fact, misrepresentation or fraud. We don't know, and it might be good to talk about this.

Non-advised partial claim acceptance is just 1%, compared to 3% for advised channel claims. This gap is again bigger than it looks. It will reflect a mix of things: the first is again product design. Advisers are more likely to choose complicated but comprehensive products which include partial payments. Non-advised channels, in their quest for simplicity, tend not to have these features. Another possibility is that advisers can advocate for payments for their clients under sections of their complex wordings that clients themselves might overlook even if they buy a complex product from a non-advised channel. Lastly advisers may be twisting insurance company arms: a client on their own is just one client, an adviser represents a large number of current and future clients too, which may prompt a little more flexibility in marginal cases. 

Both channels have the same level of 'undetermined or unspecified' outcomes - of 3%

That leaves the 'Accepted in Full' category of claims at 74% for non-advised and 76% for advised channels.

Of course, these are only averages, for some companies the decline rates are higher, and some much higher. There also appears to be an interesting effect on the level of disputes, but we will write on that later. 

Lastly it should be pointed out that the claim acceptance rate on insurance you don't buy is always 0%. I am a great advocate for insurance and feel that non-advised cover fills an important gap for many people. 74% full claim success rate is a very, very, great deal better bet than not buying cover at all. 

Fidelity Life Offers Earthquake Support to Advisers and Policyholders

16. November 2016 08:26 by Kelly in   //  Tags:   //   Comments (0)

Fidelity Life announces earthquake support in press release below:


Fidelity Life has today announced support for advisers and policyholders following yesterday’s devastating earthquakes.

Advisers are being encouraged to offer their life insurance clients who have been affected by financial hardship from the earthquake the opportunity to waive their risk insurance premiums for the next three months.

Policyholders’ insurance cover will stay in place during this period meaning they can still claim if they need to.

In addition, for any valid disability claims accepted during the wait period and arising from the earthquakes, Fidelity Life will make an early payment of the insured’s first monthly benefit during the wait period if there is known or perceived hardship.

This relief package is available on application to clients in the Wellington, Marlborough and North Canterbury regions who meet the hardship criteria.  Some people may also be affected in neighbouring regions and support will be extended to those who meet the hardship criteria in Wairarapa, Manawatu, the West Coast and Canterbury on a case-by-case basis.

“Our thoughts are with our advisers, policyholders and their families following yesterday’s devastating earthquakes in Wellington and the South Island,” says Chief Executive Nadine Tereora.

“A number of our policyholders will be experiencing hardship in the weeks and months ahead and we would like to extend a helping hand to our advisers and their clients over this time of uncertainty.” 

Policyholders just need to complete a brief Earthquake Relief application form.  This form is also available on Fidelity Life’s adviser website under the ‘forms and templates’ section.

Advisers should contact their BDM or Fidelity Life’s Client Services team for assistance on 0800 88 22 88.


Quotemonster Product Settings

15. November 2016 12:02 by Kelly in   //  Tags:   //   Comments (0)

Did you know you can change the quote settings in Quotemonster? 

This is a vital screen to check so you are aware of the products you are quoting for each insurer. It is also the main reason people get pricing differences on Quotemonster, they are not quoting the product they think they are.
In the top right-hand corner of the screen there is a 'Settings' button. This will give you a screen like the one shown below and allows you to add or remove companies from your comparison and also select different products each company offers. You can select or remove extras packages or change from a regular product to deluxe.


Winners of the Annual New Zealand Insurance Industry Awards 2016

14. November 2016 08:21 by Kelly in   //  Tags:   //   Comments (0)

The winners of the 5th Annual New Zealand Insurance Industry Awards 2016 hosted by ANZIIF are as follows:


Advisers and ASICs Claims Review

11. November 2016 08:06 by Kelly in   //  Tags:   //   Comments (0)

Advisers in Australia seemed to line up, initially, with insurers in expressing some discomfort at the release of data contained in ASIC's recent report on claims payment in Australia. In New Zealand, unaffected by ASIC's jurisdiction, people that follow such things have tended to focus on the positive endorsement of advisers and advice contained in the review: that claims are more likely to be paid when advice was provided during the sales process, a pretty powerful endorsement.

Now I have seen the first article from Australia which picks up on this point, and I am delighted to do so. It is often easy to think of the regulators job as an adversarial one. They can become adversarial, certainly, but don't necessarily want to function that way. In fact, the more we all focus on a kind of 'market development' paradigm, the better the whole outcome will probably be. This report actually contains a lot of information useful if you care about the development of the market as a whole.