Chatswood Data Services for Insurance Industry Participants

November 2016

Alan Rafe and Russell Hutchinson

www.chatswood.co.nz

Chatswood Data Services

2016 Review

Products and Planned Developments

GOOD INTELLIGENCE HELPS YOU

MAKE GOOD CHOICES

2 www.chatswood.co.nz

Strategy does not take place in a vacuum. Whether you are an adviser

contemplating a business purchase, or sales or marketing executive at an

insurance company you know that strategy does not exist in a vacuum. The

environment, and what changes we can expect in: the economy, legal and

regulatory changes, competitors, and society as a whole. Do you know enough

about the current environment?

Well, here is a suggested self-test. Just ten quick questions. This is not meant

to be an exhaustive list, just a quick check-up.

It is all in this presentation on our Slide Share page. It gives questions, and

then answers and links to the data on the next page of the presentation.

ECONOMY – KEY QUESTIONS


1. What is New Zealand’s GDP?

2. How fast is it growing?

ECONOMY – KEY QUESTIONS


Q: What is New Zealand’s GDP?

A: About $240 billion

Q: How fast is it growing?

A: Growing at around 3% p.a. in October 2016

More information:http://m.stats.govt.nz/browse_for_stats/economic_indicators/GDP/GrossDomesticProduct_HOTPJun15qtr

?gclid=CjwKEAjw1qHABRDU9qaXs4rtiS0SJADNzJisqXAfx07gAUagcqQQRaoiGUvd0FF_lnIrZ9YndXdlkx

oCLH7w_wcB

http://m.stats.govt.nz/browse_for_stats/economic_indicators/GDP/GrossDomesticProduct_HOTPJun15qtr?gclid=CjwKEAjw1qHABRDU9qaXs4rtiS0SJADNzJisqXAfx07gAUagcqQQRaoiGUvd0FF_lnIrZ9YndXdlkxoCLH7w_wcB


MARKET – KEY QUESTIONS1. What is the population of New Zealand?

2. What proportion are working age?

3. What is the median income?

4. What proportion of Auckland’s population was born outside New Zealand?


MARKET – KEY QUESTIONSQ: What is the population of New Zealand?

A: About 4.7 million - http://statistics.govt.nz/tools_and_services/population_clock.aspx

Q: What proportion are working age?

A: Just over 3 million -http://www.stats.govt.nz/browse_for_stats/population/estimates_and_projections/NationalPopulationEstim

ates_HOTPAt30Jun16/Commentary.aspx

Q: What is the median income?

A: About $95,000 p.a. –per householdhttp://www.stats.govt.nz/browse_for_stats/people_and_communities/Households/HouseholdEconomicSur

vey_HOTPYeJun15.aspx

Q: What proportion of Auckland’s population was born outside New Zealand?

A: About 40% of Aucklanders were born overseas compared with about 18%

of people outside of Auckland - http://www.stats.govt.nz/Census/2013-census/profile-and-

summary-reports/qstats-culture-identity-auck-mr.aspx

http://statistics.govt.nz/tools_and_services/population_clock.aspx

http://www.stats.govt.nz/browse_for_stats/population/estimates_and_projections/NationalPopulationEstimates_HOTPAt30Jun16/Commentary.aspx

http://www.stats.govt.nz/browse_for_stats/people_and_communities/Households/HouseholdEconomicSurvey_HOTPYeJun15.aspx

http://www.stats.govt.nz/Census/2013-census/profile-and-summary-reports/qstats-culture-identity-auck-mr.aspx

INDUSTRY SIZE


1. What is the in-force premium of the life insurance sector (FSC member

data) in June 2016 (roughly this means, the in-force premium for the

industry – excluding health, but including groups)?

2. How much business is written in a typical quarter?

3. How much premium was in-force 10 years earlier, in June 2006?

INDUSTRY SIZE


Q: What is the in-force premium of the life insurance sector (FSC member

data) in June 2016 (roughly this means, the in-force premium for the

industry – excluding health, but including groups)?

A: About $2.3 billion in-force in June 2016 http://fsc.org.nz/site/fsc/FSC%20Trad%20Risk%20Summary%202016-06.pdf

Q: How much business is written in a typical quarter?

A: About $62 million new business in the quarter -

http://fsc.org.nz/site/fsc/FSC%20Trad%20Risk%20Summary%202016-06.pdf

Q: How much premium was in-force 10 years earlier, in June 2006?

A: About $1.2 billion in June 2006 -

http://fsc.org.nz/site/fsc/files/Statistics/2006//TraditionalRiskBus30.6.2006(Sum1).pdf

http://fsc.org.nz/site/fsc/FSC Trad Risk Summary 2016-06.pdf

http://fsc.org.nz/site/fsc/FSC Trad Risk Summary 2016-06.pdf

http://fsc.org.nz/site/fsc/files/Statistics/2006/TraditionalRiskBus30.6.2006(Sum1).pdf


DISTRIBUTION1. What proportion of the personal (life, IP, trauma, and TPD) insurance

market is sold by advisers?

2. How much is direct?


DISTRIBUTION1. What proportion of the personal (life, IP, trauma, and TPD) insurance

market is sold by advisers?

2. How much is direct?

About 50% of all business (excluding group) is sold by advisers.

About 11% is direct

Based on FSC data channel share analysis, analysts reports, and news

publications – estimate by Chatswood Consulting Limited June 2016.

LAW AND REGULATION


1. Who is the prudential regulator for New Zealand life insurers?

2. How many QFEs are there?

3. What is the Authorised Financial Adviser Code Standard Eight?

The Reserve Bank of New Zealand is the Prudential Regulator for Insurers. If

you thought the Financial Markets Authority that’s because they are the

conduct regulator for licensed financial entities – which includes insurers. -http://www.rbnz.govt.nz/regulation-and-supervision/insurers

There are 57 QFEs at the time of writing - http://fma.govt.nz/compliance/lists-and-

registers/qualifying-financial-entities-qfe/

The AFA Code of Conduct states that Code Standard Eight is - Code Standard

8 When providing a financial adviser service to a retail client, an Authorised

Financial Adviser must agree with the client the nature and scope of the

service to be provided - http://www.financialadvisercode.govt.nz/assets/Code-of-Professional-Conduct-

for-AFAs/Code-of-Professional-Conduct-May-2016.pdf

http://www.rbnz.govt.nz/regulation-and-supervision/insurers

http://fma.govt.nz/compliance/lists-and-registers/qualifying-financial-entities-qfe/

http://www.financialadvisercode.govt.nz/assets/Code-of-Professional-Conduct-for-AFAs/Code-of-Professional-Conduct-May-2016.pdf

MORE INDUSTRY DATA


Chatswood Consulting Likes to collect data on a wide range of subjects for the

insurance industry. We regularly publish updated market information covering:

• Premiums – life, trauma, TPD, IP, and mortgage insurance

• Premiums – health / medical insurance

• Premiums – Bank and direct insurance premiums

• Advisers – advisers, membership of groups

• Buying behaviour – Analysis of quoting activity by advisers using Quotemonster

• Commissions – insurance commission offers

• Industry News – a quarterly review of all the main news in the life and health

insurance industry.

• Legal and regulatory review – a tracking review of all changes in law and

regulation related to a the broader financial services industry

We believe that data helps to make better decisions. The more data, the less

guesswork.

MARKET DATA AGENDA


• Our intention: to always seek to bring good quality data to life and

personal lines marketing management decisions

• Background: Chatswood Consulting Limited, Quality Product Research

Limited, Confidentiality

• Overview of Market Information Services:

Chatswood: Life Pricing, Medical Pricing, Commission Comparison,

Quarterly Life Report, QM Data, Bancassurance, Group Medical, Direct

Pricing API, People Like Us Data

Quality Product Research Limited: Product Rating Database, QPR API

Access for premiums and research.

• Discussion of your information needs and desired roadmap for information

use and new developments. Walk through and questions as we go.

INSURANCE: LIFE & PERSONAL MARKET


Existing Competitors

New Entrants

Buyers

Substitutes

Suppliers

Distributors

Dealer Groups

Professional Associations

Product Prices

Commission Rates

Agency Terms

Insurers Activities

Product Changes

Regulatory and Legal

Changes

Technology Changes

MARKET INFORMATION SERVICES


Product Content Clients Freq. NumberPrice /QTR+GST

(at Nov 2016)

Life Pricing

Database

220,000+ observations, charts and tools – Life, TPD, Trauma, and

IP

Life Insurers Constant 9 $5,000

Medical Pricing

Database

60,000+ observations, charts, and tools – medical insurance Medical Insurers Constant 5 $3,000

Commission

Comparison

Full dynamic comparison of remuneration systems including

business modelling & groups

Life Insurers Constant 7 $3,000

Quarterly Life

Report

Quarterly news, information, and commentary Life insurers Quarterly 8 $3,000

QM Data Product and advice process insights based on more than 100,000

quotes per month done on Quotemonster

Life insurers Quarterly 4 $3,000

Bancassurance

Rates

Adds premium rates for Life and Trauma for ANZ, ASB, BNZ,

Westpac, and KiwiBank

Life Insurers Demand-

based

4 $3,000

(per update)

Group Health

Comparison

Compares major group health products and highlights key points of

difference and total score differences

Health Insurers Demand-

based

New $6,000

(per update)

Above services are provided by Chatswood Consulting Limited. Those below are provided by Quality Product Research Limited

Product Rating

Database

25,000+ data points comparing all personal lines (inc. medical) All Insurers Constant 12 $2,000

QPR API Access Allows access to premium calculation engine and rating for advised

insurance services only (like site users)

Advice

businesses

Demand-

based

2 Depends on data

selected

OTHER DATA AVAILABLE


• Client lapse and repurchase model

• Adviser sales and revenue

• Regulatory changes tracking

• Sales reference standards – all legal and regulatory requirements for personal

insurance sales

• Channel market share

• Pace of change data

• Average basket of insurance sold

• Numbers of members of groups and dealer groups

• Market share of quoting

• Pricing index

• Market structure

• Competitor profile

• Advice use cases

WHY RESEARCH?


We believe:

1. Good decisions are built on good data

2. Understanding your environment is critical to thriving in it

3. We can learn from the mistakes of others

4. An external view helps to shake up complacency and dislodge assumptions

5. Modelling tools can help you create alternatives and test hypotheses

LIFE PRICING DATABASE


MEDICAL PRICING DATABASE


COMMISSION COMPARISON


QUARTERLY LIFE REPORT


QM DATA


BANCASSURANCE RATES


PRODUCT RATING DATABASE


CHATSWOOD CONSULTING

Chatswood Consulting Limited specialises in providing marketing,

distribution, and product development services to financial sector

companies: insurers, fund managers, banks, financial advice firms,

and industry associations. Chatswood works with companies to

develop and manage new marketing opportunities channels for

financial services business.

Russell Hutchinson

Alan Rafe

Rob Dowler

Kelly Pulham

Frances Hutchinson Nicola Reynolds


Our team includes:

Strategy, sales and

marketing consulting,

research

Distribution strategy,

product research

Industry and compliance

consulting

Business development

manager

Database and

report writing

Researcher

Albert Liu

IT manager


We are the only management consultancy specialising is in the marketing

and sales challenges of distributing insurance products in New Zealand.

How Chatswood Can Help You.

Half our work is made up of syndicated research services covering

agency terms, commission rewards, life insurance and medical insurance

product pricing. We also conduct a quarterly industry survey.

Chatswood Research Services.

The balance of our work is bespoke management consulting around

specific sales and marketing objectives. Recent projects include:

Recent Achievements and Projects.

Our terms of engagement are flexible and competitive. We cover the

requirement for confidentiality and how we charge, work, and report to

you. Review Engagement Information.

For details about the Chatswood Team, our clients, and published

commentary see following slides


http://chatswood.typepad.com/moneyblog/how-chatswood-can-help-you.html

http://www.chatswood.co.nz/moneyblog/7-industry-research-services.html

http://chatswood.typepad.com/moneyblog/recent-projects.html

http://www.chatswood.co.nz/moneyblog/engagement-information.html



Accuro Health Insurance Nib NZ Limited

AIA New Zealand OnePath Life (NZ) Limited

AMP Services (NZ) Limited Partners Life Limited

Asteron Life Limited Pinnacle Life Limited

Bank of new Zealand Quality product Research Limited

Cigna Life Insurance NZ Limited Reserve Bank of New Zealand

Crowe Horwath Rothbury Insurance Brokers

Fidelity Life Assurance Sovereign

Financial Markets Authority Tarawera Publishing Limited

Kiwi Insurance Limited - KiwiBank The Co-Operative Bank Limited

Contact us for details of who to contact at

each client to ask for a reference on the

quality of our work

Like many brokers, we do business with everyone, and have no dominating

relationship

http://chatswood.typepad.com/moneyblog/contact-us.html

28

THANK YOU!© Chatswood Consulting Limited

Visit us at

www.chatswood.co.nz25

www.chatswood.co.nz

November 2016

www.chatswood.co.nz25

This report is a confidential publication. This material is Copyright. No reproduction permitted in whole or in

part except without the prior approval of Chatswood Consulting Limited. Public reference to material in the

report requires reference to Chatswood Consulting Limited and must be sought and received in advance.

While every effort has been made to ensure the accuracy of the information contained in this document,

Chatswood Consulting Limited takes no responsibility for actions undertaken by readers that may have

been made either in whole or in part on the basis of the information contained in this report.

Economy & Finance

Chatswood Data Services for Insurance Industry Participants