Is Health Insurance Affordability in Crisis?

6. July 2015 08:51 by Kelly in   //  Tags:   //   Comments (0)

The New Zealand Herald writer Rebecca Savory reports: 

"Increasing health insurance premiums are on the increase and it is a major issue, especially for the elderly. At the most extreme, a 73-year-old non-smoking couple with no pre-existing medical conditions could be paying more than $1000 per month in premiums, a 2014 Consumer NZ survey revealed."

Which is all true, on a nil excess with the addition of a specialists and tests benefit the couple could pay as much as suggested. The article then explains a number of ways in which the couple progressively reduced the cost, down to just $63 a month, and then opted for self-insurance. Which also looks quite sensible.

What I find difficult to understand is that this is described as 'Crisis of Health Insurance Affordability.' Presumably we don't consider health insurance a social necessity, otherwise we would extend the coverage offered in that system. 

Click here to read more in this article in NZ Herald.

Pricing Changes for Fidelity Life and Southern Cross

3. July 2015 08:36 by Kelly in   //  Tags: , ,   //   Comments (0)

The pricing changes for Southern Cross VIP plans and Fidelity Life's Life and Trauma rates effective 1 July are live on Quotemonster.

Underinsurance Ratio Revisited: Trust Cover Level Comparisons, Not GDP Comparisons

2. July 2015 08:16 by Kelly in   //  Tags:   //   Comments (0)

Recently we published links to an article on underinsurance. There were many good things in the article, which was good on cover levels but the illustration of premium as a percentage % of GDP figure is a bit misleading, and needs explaining further. The original article is at this blog post if you want to look it up. 

The suspect comparison is this: "New Zealand spends 2.8 per cent of GDP on insurance, compared to the OECD average of 8.4 per cent."

Are kiwis spending only 25% of what they need to? No. We don't think so, and that's not what the sum insured comparisons suggest either. Don't get me wrong, we are spending too little, but not by that much. 

You see there are some key differences between jurisdictions that make comparisons at the level of spending a bit hazardous. Some markets still buy a lot of whole of life and endowment products, which are classified as insurance, but contain big portions of investment as well. In many markets more is spent on more generous accident insurance than our centralised and skinny ACC scheme.The same has to be considered for medical insurance in any group in which the USA figures. Another factor may be differences because GDP per capita is so much higher in some markets, and that allows for higher spending on items such as financial contracts which can expand after basics like food, heat, and accommodation are paid for. 

So we constructed a narrower peer group. By our calculations a more reasonable average excluding markets which are a lot richer and have different structures we get an average closer to 4% of GDP, it is 5% of GDP if the peer group is restricted to the industrialised world. Now our rate looks like it is about one third to one half lower than it should be. For most people in work the most obviously missing benefit, to return to the original article, is income protection. 

Customer Views of FAA/FSP - Colmar Brunton Report

1. July 2015 08:56 by Kelly in   //  Tags:   //   Comments (0)

MBIE has published the Colmar Brunton report on focus groups with customers as a part of the FAA/FSP review. The report makes interesting reading (find it at this link). Some highlights for us: 

  • Consumers were aware of conflicts of interest
  • ...but had little awareness of the different forms of registration and authorisation and did not understand what the difference was
  • There was a definite decision not to take as much advice when investment clients were presented with a fee option
  • Clients reported little difference between pre-2011 and post-2011 behaviour in their advisers
  • They were not aware of much commission disclosure by insurance advisers - but that didn't surprise me reading the report. Most insurance advisers do not disclose commissions

There are a host of other good things - and best of all is to simply read the quoted consumer comments. 

Winter Related ACC Injuries

30. June 2015 08:32 by Kelly in   //  Tags:   //   Comments (0)

As it is getting much colder remember to stay safe this winter - ACC released some numbers from the last year of claims made to winter-related injuries.

In 2014 ACC paid thousands of claims relating to winter activities including burns from heaters and fireplaces, skiing injuries, chopping and stacking firewood injuries to name a few.

Here is a list of the number of claims and amount paid:

  • Slips on ice (not including those while playing sport): 925 claims, costing$1,381,775
  • Skiing: 7608; $13,488,971
  • Snowboarding: 5897; $6,923,364
  • Ice skating: 1587; $1,667,974
  • Curling: 31; $31,222
  • Chopping and stacking firewood: 7242; $6,683,786
  • Scarves: 21; $9,172
  • Hypothermia: 18; $26,129
  • Frostbite: 6; $10,951
  • Burns on heaters or fireplaces: 874; $380,942

Click here to read the full article on Stuff.

Underinsurance in New Zealand

29. June 2015 10:51 by Kelly in   //  Tags:   //   Comments (0)

This article on stuff.co.nz by Richard Meadows points out just how underinsured Kiwis are. New Zealand spends 2.8 per cent of GDP on insurance, compared to the OECD average of 8.4 per cent.

The article breaks it down into each category and shows the following figures for each:

  • Home: 98% coverage
  • Vehicle: 96% coverage
  • Life: 57-60% coverage
  • Health: 29% coverage
  • Income Protection: 15-20% coverage

Meadows interviews Dr. Michael Naylor, Peter Neilson (FSC Head), and Darrin Bull who runs strategy for Sovereign. 

Well worth a read. 

Mortgage Protection - Total and Permanent Disability

26. June 2015 08:27 by Kelly in   //  Tags: ,   //   Comments (0)

Following on from yesterdays post, the top five weighted items for Mortgage Protection insurance are:

  1. Total Disability Class 1&2
  2. Pre Disability - Time Worked
  3. Offsets
  4. Trauma Benefit
  5. Total and Permanent Disability

This post we assess the Total and Permanent Disability score and here are the sub-items:

Mortgage Protection - Trauma Benefit

25. June 2015 08:08 by Kelly in   //  Tags: ,   //   Comments (0)

Following on from yesterdays post, the top five weighted items for Mortgage Protection insurance are:

  1. Total Disability Class 1&2
  2. Pre Disability - Time Worked
  3. Offsets
  4. Trauma Benefit
  5. Total and Permanent Disability

The provision of a simpler way to qualify for mortgage protection if you suffer a trauma (even if that may not disable you) is valuable. We do not rate the qualification for all these conditions, though, because if a trauma payment is important we think that you will require a separate trauma sum insured. This post we assess the Trauma Benefit score and here are the sub-items:

Why Use Quotemonster

24. June 2015 09:36 by Kelly in   //  Tags: ,   //   Comments (0)

Here are just a few of the reasons why you should be using Quotemonster if you are an adviser in New Zealand.

Mortgage Protection - Offsets

24. June 2015 08:02 by Kelly in   //  Tags: , ,   //   Comments (0)

Following on from yesterdays post, the top five weighted items for Mortgage Protection insurance are:

  1. Total Disability Class 1&2
  2. Pre Disability - Time Worked
  3. Offsets
  4. Trauma Benefit
  5. Total and Permanent Disability

This post we assess the Offsets score and here are the sub-items:

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