“We have an underinsurance problem in New Zealand, and there’s no silver bullet to that challenge.”
Those were the words of Fidelity Life acting chief executive Ian Clancy (pictured) when he recently sat down with Insurance Business to talk about what he considers a “multi-headed beast” of a problem that will need collaborative effort to solve.
Lifting the lid on the factors affecting the low levels of insurance take-up, Clancy said: “It’s almost the country culture in New Zealand that exists, and it exists more broadly than just life insurance. Perhaps in other countries in the world they’re accepted as normal rather than unusual, whereas sometimes I think maybe in New Zealand it’s less normal. And that’s almost a country culture piece.
“There are product challenges; there are education challenges. It’s a multi-headed beast, how we solve that underinsurance challenge. And I think the product piece, while there’s not an affordability challenge when people are younger, there is when people get older. That’s where sometimes we see lapses come through.
“So, it’s one of those challenges that requires industry [effort]. No one organisation has solved it, which tells you that it’s a much broader problem than it is for organisations to solve.”
According to a 2022 Financial Services Council of New Zealand (FSC) report, 38% of New Zealanders have life insurance; 32%, health insurance; 18%, trauma or critical illness insurance; 14%, total and permanent disability insurance; and 11%, income protection insurance.
It is for the above reasons that Clancy sees the importance of working closely with the FSC, to try to address the problem as a sector. He said: “What are some of the things that we can do more strategically as an industry to try and help with that financial education piece?”
Other considerations include looking at how insurance firms can work better with government. For Fidelity Life, one way it is helping to solve the problem is by creating better access to advice through the insurer’s Career connect programme.
“It’s effectively an academy for future advisers that considers more broadly the communities that represent New Zealand and how do we help create the advisers of the future through a training and education programme that we support,” Clancy told Insurance Business.
“And we then help place them with some of our bigger advisers so that we’re bringing new advisers into the market who may be able to meet he needs of people whose needs aren’t being met today. So, there’s a few things that we’re doing internally. But there are, I think, some other things we can do as an industry to help really improve that challenge.”
The acting CEO added: “Certainly some of the advisers that we’re talking to are finding recruitment of good capability continues to be a challenge. That’s why we’ve launched the Career connect programme – to really try and bring potential candidates through an education process, to be able to help the advisers recruit people that they need.”
Clancy, who was chief operating officer and is currently leading Fidelity Life in an interim capacity while the company looks for a new chief executive, wants the above to be a key focus for the next boss.
“[We want] someone who cares about the long term good of New Zealand, and about what we’re trying to do from an insurance perspective,” he said. “We have an underinsurance problem in New Zealand, and there’s no silver bullet to that challenge.
“So, someone who’s taking a really purpose-led view and recognising the value that life insurance can bring to solve those problems is someone that I’m really looking forward to working with.”
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