Insurance broker laments "one of the biggest problems that we have"

Managing director points to ongoing battle

Insurance broker laments "one of the biggest problems that we have"

Insurance News

By Terry Gangcuangco

While people are “really starting to understand the benefit” of health and life coverage, there is one particular challenge that Vahry Insurance founder and managing director Julia Vahry (pictured) believes is proving to be a hindrance. Here, the Waikato-based cop-turned-broker shines a spotlight on an “ongoing battle” in the sector.

“One of the biggest problems that we have, especially in employment insurance, is not necessarily the cost of it, or selling the idea of it,” said Vahry, who pointed to New Zealand’s fringe benefit tax.

“What happens is,” she explained, “if the employer provides staff with benefits, such as health or life insurance, then they get taxed on top of that. So, it doesn’t just mean paying for the life and health insurance. It ranges from 40 up to 69% extra on top of that, that they have to pay to the government.

“No business owners are given a tax break from that, which is really backwards to me. Our public health system is completely swamped and overwhelmed, and there’s delays, delays, delays. So, what [the industry is] doing is we’re actually removing the pressure off the public health system and creating more of an equitable system.”

In Vahry’s view, the government might be worried that a two-tier health system is being created, which she stressed isn’t the case.

The brokerage boss declared: “We’re creating a bit more balance so those that can’t afford or don’t have the luxury of a private health system get faster care in the public health system, because those that have got private healthcare don’t need to use the public system as much, unless it’s an acute event, of course.

“To be fair, that’s actually one of our biggest issues. [Employers] really want to go for this, but they’re going to get slaughtered from a tax perspective. And that’s really off-putting for business owners, because you’re getting punished, in a way, for trying to provide something that helps out their staff and their families and our communities, which is a real challenge.”

“It’s going to be an ongoing battle, I think, until we can get it through to government that it’s a positive thing to just let the private system help,” she added.

Barrier aside, Vahry said employment-based health & life and trauma insurance currently makes up the bulk of what she does.

“Health & life is now front of mind,” she asserted. “Personally, I don’t know if I’m having to hunt business as much as I had been previously. I seem to have people just genuinely more interested. It’s really highlighted here in New Zealand, given the delays in the public health system.

“That has really encouraged a lot of people to start looking at options and utilising the private health system by getting private health insurance, so that’s been really great. With retention issues and recruiting and finding staff, a lot of business owners now are looking at providing insurance as a benefit as a part of their work perk.”

For Vahry, though, it’s been a focus of hers even before the age of coronavirus.

The MD told Insurance Business: “I’ve always seen the benefit of it prior to COVID, and I was really trying to work hard in terms of offering that to business owners. It’s just that they didn’t see the value until COVID hit, and now, because of delays in the public health system, they’ve got staff or family who are sick and then can’t get treatment fast enough, which subsequently results in poor performance or absenteeism.

“So, what they’re finding now is, ‘If we provide our staff health insurance as a work perk, then we know that they’re going to be seen and treated faster, and we can get them back to work quicker as well’. Obviously here we are only just facing COVID, really – we’ve been hiding for two years.”

Moving forward, Vahry is positive about the broader prospects.

“Insurance is a powerful, powerful tool for helping and saving people’s lives and setting families up for generations,” she stated. “It can be used so much more than what people realise. Aside from that, [there are] other organisations that you can partner with.

“When you look at it holistically, there’s so many opportunities to partner with like-minded companies to make it more than about just insurance. It can be about so many other amazing things, like encouraging people to live their best lives while they’re here. We’re doing some really cool projects at the moment, which kind of falls all within that category of just encouraging people to be their best selves.”

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