medical with life cover - opportunity for advisers and clients
TRANSCRIPT
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Medical with Life Cover
Opportunity for Advisers and
Clients
February 2015
Russell Hutchinson and Alan Rafe
www.chatswood.co.nz
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Long-term Trend: Medical and LifeMore than 25 years ago the health and life markets were largely separate, then
this happened
• Sovereign bought Met Life
• TOWER Life bought AXA Health
• Club Life – now OnePath life
• Partners Life
• Fidelity Life and nib
Other insurers without health cover are interested. Even insurers with poorly
operating health books see the value of health insurance as a gateway product
to sales of more life, disability, and trauma insurance. In parallel we have seen:
• More mortgage cover
• More income protection
• More trauma cover
www.chatswood.co.nz
February 2015
3www.chatswood.co.nz
February 2015
Better Together: Joint QuotingNumber of Health only Quotes in June 2014 1,871
Number of quotes with health in (last crunch, 2-3 re-crunches is typical) 3,295
Proportion of quotes including health of any kind which are health only: 57%
Proportion of all advisers that have quoted health at least once: 66%
400
500
600
700
800
900
1000
1100
1200
Jul-14 Aug-14 Sep-14
Accuro AIA Fidelity / nib OnePath Partners Life Southern Cross Sovereign
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Benefit Combinations With Health
Benefit Combinations with Health in last crunch How many in June
Health 1,871
Health Life 330
Health Life Trauma 283
Health IP Life Trauma WOP 111
Health IP Life TPD Trauma WOP 100
Health Life Repayment Trauma WOP 73
Health Trauma 65
Health Life TPD Trauma 53
Health IP Life Repayment TPD Trauma WOP 47
Health IP Life Repayment Trauma WOP 32
Subtotal 2,965
Others 330
Total 3,295
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February 2015
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Excess Options
0
200
400
600
800
1000
1200
1400
$- $250 $500 $1,000 $2,000 More
Nu
mb
er
of
Cru
nch
es
Excess Option
Health Quote Excess Options
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February 2015
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Add-On Options
Basic32%
With Specialists68%
Health Quote Add-On Options
Note: Other combinations with GP and Dental too small to graph.
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February 2015
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Children in Health Quotes
0
500
1000
1500
2000
2500
0 1 2 3 4+
Nu
mb
er
of
Cru
nch
es
Number of Children
Number of Children Included in Health Quotes
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February 2015
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How Clients Use Medical CoverFull health Medical Trauma Disablement Death
Care free or
careless?
Specialists and
tests
Trauma add-
ons
Mortgage
cover
Terminal Illness
Basic medical Limited Trauma Income
protection
Life Cover
Fully featured
medical
insurance
Fully featured
trauma
Total and
Permanent
Disablement
Non-Pharmac
cover
International
Direct / “Everyday”
products
Doctors’ Visits etc.
Clients can see this
need first!
Choices are created by the financial assistance provided
www.chatswood.co.nz
February 2015
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Competition: Making Products Better
• Stand alone specialists and tests sales
• ‘Best Doctors’ diagnosis tool
• Simple direct products – low cost, low benefit, high co-
payments
• Non-Pharmac drugs cover
• Loyalty rewards offering procedures outside scope of medical
cover e.g. Sterilisation, Breast Reduction & Bariatric Surgery.
• Extensive range of products and benefit variations on offer
prompted by new market entrants, where previously a couple
of providers held market monopoly.
www.chatswood.co.nz
February 2015
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Advisers: Please Consider• Medical insurance has a role in the risk package
• Role of medical, IP, Trauma alongside state benefits
• Overseas treatment - International options
• Sales process innovations
• Bundling
• Health savings accounts
• Long-term care cover
• Screening programmes
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February 2015
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How Do You Compare Products?Risks
• “The One thing” to rule them all
• The “non-compliant” feature
Factors
• The whole product
• Price
• Service
• Claims
• Company Factors
Preference
• A Package View
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February 2015
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Overview• Medical is the next protection benefit clients can see the need for
• It is a great way to open up a constructive discussion about all the
other benefits
• Good advice acknowledges that it is part of a personal risk plan
• That risk plan isn’t alone: it exists in a context of personal wealth,
family, and state health and welfare provision
• An overview considering a range of factors rather than just one
factor is the right starting point for product selection
www.chatswood.co.nz
February 2015
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Current Issues in Comparing
Medical• Guaranteed wordings
• Provides customer value in knowing wordings that cannot be altered
• Provides an option for unsustainable books
• Non-Pharmac
• We are seeing claims paid for Cancer related treatment
• Increased our weighting due to claims experience being higher
• Still working to understand the impact of non cancer related treatments
• Need to understand the impact of Chronic Condition exclusions
• Impact of out of hospital benefits
• Breast Reconstruction
• Cosmetic versus medically required
• Covered under main surgical benefit
• Including realignment, tattooing
• Exclusions
• Different excesses
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February 2015
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What We Compare on QuotemonsterCompany Basic Excess Options Specialist &
Tests Excess
Options
Saying Specialist
Excess
Used
Accuro$0, $250, $500, $1,000,
$2,000, $4,000
$0
$250
Nil excess on specialist & tests
no matter which base excess is
selected.
$0
AIA$0, $250, $500, $1,000,
$2,000
$100 $100 excess on specialist &
tests no matter which base
excess is selected.
$100
nib$0,$250, $500, $1,000,
$2,000, $4,000, $6,000
$0 Nil excess on specialist & tests
no matter which base excess is
selected.
$0
OnePath$0, $250, $500, $1,000,
$2,000, $5,000
$250 $250 excess on specialist &
tests no matter which base
excess is selected.
$250
Partners Life $0, $250, $500, $1,000,
$2,000, $5,000,
$10,000
$250 $250 excess on specialist &
tests no matter which base
excess is selected.
$250
Southern
Cross $0, $250, $500, $1,000
$0 Excess for specialist & tests is
matched to whichever base
excess is selected.
$0
Sovereign$0, $250, $500, $750,
$1,000, $2,000, $4,000
$0
$250
Nil excess on specialist & tests
no matter which base excess is
selected.
$250
www.chatswood.co.nz
February 2015
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Getting it Right: Settings
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February 2015
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Rating Process
Definition Incidence Frequency Amount
Readability Impact
Better research to support recommendations, based
on: the meaningful differences between products, on
your client’s actual situation, and on real-world risks.
Based on actual
risks and
payment
Specific to each
client and
options
Low cost, easy
to update and
use
Male / Female
Employed / self-
employed
Age
Options
selected
Realistic claims
scenario
Each report
varied for each
quotation
www.chatswood.co.nz
February 2015
17 www.chatswood.co.nz17
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Information was current to 2 February 2015.
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Rating Process
Definition Incidence Frequency Amount
Readability Impact
Better research to support recommendations, based
on: the meaningful differences between products, on
your client’s actual situation, and on real-world risks.
Based on actual
risks and
payment
Specific to each
client and
options
Low cost, easy
to update and
use
Male / Female
Employed /
self-employed
Age
Options
selected
Realistic
claims
scenario
Each report
varied for each
quotation
www.chatswood.co.nz