Built-in Failure - Poor Product Design and Execution

30. August 2014 14:38 by Russell Hutchinson in   //  Tags:   //   Comments (0)

I continue to receive complaints about policy documents from advisers. Following blogging the Zurich Life report on Misinsurance in Australia a Wellington-based adviser in good standing, who invests a lot of time in the development of his business and the industry sent me this: 

"I can’t think how many times I have heard clients confused about what cover they have (misinsurance) because they read it in the policy document.

There is no excuse for clients today not to be given clear, precise documentation that only includes the cover they have. If someone only buys a life insurance policy, why would anyone want a policy document that describes every product you sell?"

I have to agree. Not all things have improved in this regard. There is a company reception area I sometimes sit in which has a copy of a life insurance policy - it takes up just one page.

"This is an issue, I have seen it literally hundreds of times even when I have sold the product and explained it well. We know why, it’s because of the cost of printing policy documents. Let’s put it all in one document and it saves money in printing, is more convenient than sending multiple policy documents and should be easier for the client."

When you're thinking about what's best for the company, not the client, you are on the wrong track. But just in case you're feeling smug about how great your document is because you only include specific benefit sheets, hold on:

"Some manufactures print documents on the fly more specific to the product purchased but still include “options”, which the client never purchased. If they don’t have it, don’t put it in the policy wording. In this day and age there isn’t any excuse why policies can’t be printed on the fly to include only the features you have actually bought. A one stop policy document with all the plain English awards in the world, makes no sense at all when read on its own or trying to navigate to the actual bits you have bought."

The emphasis is editorial on my part.

I disagree a bit on the issue of plain English. I like plain English, but the document architecture is perhaps even more important: shorter sentences, and shorter words, are the mainsprings of plain English documents. But if you have to flick between a 'base policy wording' to a 'benefit sheet' and back to a 'schedule' and also to a 'definitions' section then you are demanding a reading task that is frankly beyond either the skill or the patience of a majority of customers. 

The point about technology is also well made. Why not build the document based on what the client bought? Before anyone writes to me about how expensive and difficult this is, I should point out that Quality Product Research Limited builds quotes and research reports that are tailored to the specific options chosen. So it isn't that hard. 

The adviser continues: 

I challenge any manufacturer to go through their policy document for just life insurance, no options and cross out the bits that don’t apply. Let’s see where misinsurance starts.

He has a point. That's the main reason I wrote this piece over at goodreturns. 

You can also read this Download Insurance Policy Readability Review v1.  

Asteron Pricing Update

27. August 2014 15:39 by Kelly in   //  Tags: , , , ,   //   Comments (0)

Updated prices for Asteron LOE, LOE Plus and Mortgage Protection. Please note that we are now including Increasing Claim for Asteron Mortgage Protection, which wasn't included previously. The prices have gone up by approximately 5%.


Regional Roadshows Coming in September!

26. August 2014 08:17 by Kelly in   //  Tags: , , , , , , , ,   //   Comments (0)

We're on the road again - with the huge number of new sign ups we are running another introduction session.

This session will provide an overview of the research approach used and illustrate the best approach on using the QuoteMonster Research Platform. Great opportunity to ask questions, learn what is new and as always some interesting statistics.

  • Understanding research methodology – four factors
  • Selection criteria and making better recommendations
  • QuoteMonster Tips and Tricks
  • Replacement Business Tools
  • Risks are Real

It’s a free, fast, and helpful one-hour session which will pay you dividends many times over in faster quotes, better reports, more in-depth research and solving all manner of minor mysteries in the quote tool. 

Click on the links below to register:
Wellington - 10 September
Palmerston North - 11 September
Napier - 12 September
Hamilton - 17 September
Tauranga - 18 September
Nelson - 23 September
Christchurch - 24 September
Dunedin - 25 September 

Asteron Income Protection Price Adjustment

18. August 2014 16:00 by Kelly in   //  Tags: , , ,   //   Comments (0)

Asteron has repriced income protection and mortgage repayment cover adding about 4%, on average, to pricing for to-age 65 benefits and to-age 70. 

Users of Quotemonster can access quotes on the new rates now.

Asteron Life have also updated two main policy wordings – Personal Insurance & Business Insurance. 

Please note that all the improvements listed in the table below will be passed back to existing SmartLife series customers (post 2004) under their Guarantee of Upgrade clause.  

HFANZ Statistics Show Stability in Lives Insured

13. August 2014 12:20 by Kelly in   //  Tags:   //   Comments (0)

HFANZ Statistics Show Stability in Lives Insured - a very small decline in the first quarter of this year followed a gain in the December quarter. Overall the picture is stable, and may get better still.

Health insurers have seen modest growth in claims and premium over the past year as public health spending growth continues to be reined in.

Data released by the Health Funds Association (HFANZ) today shows claims costs for the year ended June 2014 were up 7 percent on the previous June 2013 year, while premium income for the year was up by 5.3 percent – more than twice the rate of public spending growth.

HFANZ chief executive Roger Styles said the growth in private health claims and premium was not surprising considering the public health sector had been in cost-cutting mode for some time.

“With public health spending growth at very low levels, we are seeing the private sector doing more and more to fill the gaps created in our health system,” he said.

“Health insurance is increasingly called on to help fund things which people have trouble accessing publicly, such as elective surgery.”

A recent study by TNS Research showed around 280,000 New Zealanders were in need of elective surgery, with public waiting times commonly in excess of 12 months.

Mr Styles said that health systems globally were in a phase where demand was rising faster than governments’ ability to fund it through taxes.

“This means a big shift is underway in how healthcare is financed, where people will have to pay more for their healthcare. New Zealand is not immune from this shift, and insurance will likely play an even bigger role helping to fund healthcare for New Zealanders,” he said.

For further information, contact:

    Chief executive Roger Styles ph 04 499 0834 or 027 480 0072

    Media advisor Andrea McKay ph 027 555 7783.  


Quarterly statistical summary: June 2014

This statistical supplement sets out key health insurance statistics for lives covered, claims and premiums over the previous quarter and 12 month period, together with commentary on changes and underlying trends.

Headline changes

  •  Lives covered down 1200 or 0.1 percent for the quarter; reduction of 5000 or 0.4 percent for the year;
  • Premium income of $298 million for quarter, up 1.3 percent on March quarter; annual premium $1.172 billion, up 5.3 percent on June 2013 year;
  • Claims paid for quarter of $250 million, up 1.8 percent on previous June 2013 quarter; annual claims paid for June year of $967 million up 7.0 percent on June 2013 year claims.

Lives covered

The actual change in lives covered was a decline of just 1200 in the June quarter. Total lives covered as at 30 June 2014 stood at 1.334 million. On an annual basis, lives covered declined by 5000, or 0.4 percent over the year ending June 2014. The relative stability in lives covered over recent quarters is welcome, and comes after a positive December 2013 quarter suggested the prolonged period of decline in lives covered post 2008 had run its course.




Comprehensive vs Elective Surgical

The past year has seen a decrease in the number of lives covered by comprehensive health insurance (-10,300), although there has been an increase in lives covered by elective surgical and specialist policies (+5300). Elective surgical policies continue to increase as a proportion of policies, now accounting for 68.6 percent of lives covered.


Changes in lives covered by age-group

The table below gives a breakdown of the changes in lives covered over the past year by age group. A large part of the reduction is in the 35-49 age group, with this group accounting for a reduction of around 5000 lives covered over the year. A further 3000 reduction was seen in the 0-19 age group, suggesting family policies accounted for almost all of the reduction over the past year. Offsetting this somewhat was an increase of around 3000 for those aged 65 and over, as the year saw a further significant inflow of baby-boomers moving into this age group.

Table: Change in lives covered by Age: June 2014



Premium income

Premium income for the June 2014 quarter totalled $298 million. This was up $3.8 million or 1.3 percent on the March 2014 quarter. Annual premium for the year ended 30 June 2014 was $1.172 billion, up 5.3 percent on premium income for the June 2013 year.

Claims paid

Claims paid for the June 2014 quarter totalled $250 million, up 1.8 percent on claims paid in the previous June 2013 quarter. This is the second-highest level of claims paid for a quarter on record. The highest recorded claims paid for a quarter was in the September 2013 quarter, with $256 million in claims paid. Claims paid for the 12 months ending 30 June 2014 were $967 million, up 7.0 percent on June 2013 year claims.



The strong growth in claims paid recorded over recent quarters has moved annual claims closer towards the $1 billion level. It is expected that total annual health insurance claims will reach a billion dollars this year, underpinning the valuable contribution health insurance makes to total health spending.




Social Media: Advisers Lead Insurers by Miles

11. August 2014 09:12 by Kelly in   //  Tags:   //   Comments (0)

Advisers lead insurers in the use of social media to reach clients by miles, possibly parsecs. The most insightful and useful materials on Facebook are posted by advisers - and the reason is simple - practice.

What insurers are too worried to do is to take a risk with their reputation, whereas advisers are doing that every day in every interaction. That means the advisers using social media have been through dozens, if not hundreds, of cycles of experimental feedback. Advisers thinking about that carefully are using it to refine their messages and get better engagement with their clients.

But advisers should watch out - because when insurers, banks, and others wake up to the idea that social media could be a major part of their marketing their generic messaging may crowd out the efforts of individuals. Insurers can also afford to pay to learn how to catch up.

Sovereign Launches New Medical Policies

8. August 2014 10:11 by Kelly in   //  Tags: ,   //   Comments (0)

Sovereign has launched a series of new medical policies. They were launched first to the SovNet summit, and appear to incorporate some significant changes to their approach.

An eye-catching benefit is the offer to pay the client's premium if they get treated in the public system rather than claiming. This is limited to events where the client has to stay at least two nights in hospital.

Other features include higher excess levels, some non-Pharmac cover, and some other tweaks.

Changes in the health services provider area could be more significant but of those we do not have any details, as yet.

The changes will take effect on 1 September and we intend to have them available on Quotemonster and rate them on Quality Product Research at that time.

Partners Life Income Protection Wait Period Options Expanded on Quotemonster

6. August 2014 19:08 by Kelly in   //  Tags: ,   //   Comments (0)

We are pleased to announce the addition of 52 and 104 week wait periods for Partners Life Income Protection.

Fidelity Life and nib are now Combined on Quotemonster

23. July 2014 11:47 by Kelly in   //  Tags: , , ,   //   Comments (0)

Fidelity Life risk products can now be quoted to include nib health products. Go to the "Settings" screen to choose either nib's Ultimate Health or Ultimate Health Max to quote alongside Fidelity Life.

Income Protection Claims and Tax

22. July 2014 15:07 by Kelly in   //  Tags:   //   Comments (0)

Three times in the last week - from very different sources - I have heard people talk about clients on Indemnity IP claim that are not paying tax. Clients who have never received before-tax income in their lives may not realise that they must declare this income and complete a tax return. In fact, the belief is that overwhelmingly they do not do so. That is a big danger for them, but also for advisers. The name "financial adviser" means that a client may think it is your job to advise them on tax - unless you make it very clear to them that they need to get advice from their accountant on that. Companies and advisers wishing to stop themselves getting dragged into complaints about a failure to advise on tax issues should advise every new IP claimant on an indemnity benefit that they need to pay tax.