Being at the helm of the biggest insurance broking collective in New Zealand, NZbrokers chief executive Jo Mason (pictured) sure has her fingers on the pulse of the industry, and here she shares what’s in store for the sector after we leave 2021 behind.
“There are a number of challenges 2022 will bring for New Zealand,” Mason told Insurance Business. “COVID, in all its various forms, brings uncertainty which affects all parts of the industry – from business and travel insurance, to whether or not the economy will force people out of jobs or businesses to close.
“Uncertainty in insurance, while par for the course for perils that have occurred before, is difficult when trying to predict an unprecedented incident.”
Also among the challenging areas, said the CEO, will be navigating the regulatory changes in the market.
She noted: “Another challenge will be the increasing amount of regulation and how insurers and brokers can work this out together to streamline the mountain of requirements they both face – CoFI (Financial Markets (Conduct of Institutions) Amendment Bill) for insurers and FMA (Financial Markets Authority) licensing for brokers – without it overwhelming everyone in administration work resulting in the exact opposite effect on the customer to what it was supposed to do.”
CoFI, which is still a couple of steps away from receiving Royal Assent, amends the Financial Markets Act 2013 with the goal of ensuring that certain financial institutions and their intermediaries comply with a principle of fair conduct and associated duties and regulations.
Under the FMA’s new financial advice regime, meanwhile, anyone applying for a financial advice provider licence from March 16 this year needs to apply for a full licence, while those holding transitional licences will have to apply for and be granted a full licence by March 16, 2023.
“The way you operate in the new financial advice regime will depend on your plans for, and how you want to structure, your business,” said the FMA previously. “It’s important to seek professional advice before deciding whether to either apply for a financial advice provider licence, or operate as an authorised body, or financial adviser under someone else’s licence.”
Under the changes, all financial advisers must meet the same standards and are subject to a Code of Professional Conduct for Financial Advice Services.
NZbrokers, as a trusted broker network, is similarly discerning when it comes to its membership roster. The group recently welcomed “valuable addition” BMS Risk Solutions Ltd, which has partnered with UK-domiciled global broker BMS Group.
Meanwhile Mason believes that the cost of insurance, and whether or not customers will be able to continue to pay premiums at the same levels, is a challenge as well.
“While the government’s lift of the EQC (Earthquake Commission) cap is welcomed, this may be offset by rising construction costs as demand far outstrips supply,” she added. “This, combined with the unavailability of labour will become an even bigger issue next year.
“The availability of car parts is also a problem, which is starting to affect motor insurance claims and has a knock-on effect to pricing. Data privacy and climate change are also challenges our industry needs to help find solutions for.”
Read more: “2022 is a promising year in many respects”
While the difficulties seem in abundance, though, the NZbrokers chief is confident of her peers’ ability to cope.
She told Insurance Business: “Our industry is highly resilient and will continue to adapt to whatever is thrown at it, so the outlook from where I sit is always positive. Learning to streamline while still retaining the personal feel through technology is something our industry must do if we are to remain as affordable as possible for customers.
“New product and service offerings will start to shape our industry more – one that adapts well to change – despite pretending it doesn’t. We may be a bit slower to adapt, at least in the broker space, but that is usually because we place much importance on relationships and we always weigh up each change in the context of how it can strengthen our relationships with customers and insurers alike.”
Mason, who is looking forward to the holiday break at the end of this week, went on to highlight that there are “many exciting changes” coming to NZbrokers which her camp has been working on for a few years.
“These will come to fruition in 2022, and I, for one, cannot wait,” she said. “This, combined with the fabulous team we have built up over the past couple of years put us in a good space. We have a wonderfully supportive membership and a member-representative advisory board who always keeps us honest, so we are currently in a great space – and that makes me excited.”
When the network’s parent, AUB Group, announced its financial results for the year ended June 30, it cited major investment in technology aimed at enhancing the offering to members of NZbrokers, with benefits including productivity improvements and better adoption of the new regulatory regime.