Keeping one eye on the horizon

Providing insurance to one of the most underinsured countries in the world comes with obvious challenges such as the need to educate Kiwis on the benefits of protecting themselves from the unforeseen.

Financial commentators predict that the type of insurance consumers buy in 20 years will be very different to what’s on offer now. At Sovereign, we are preparing ourselves for the future by using the power of technology and data to target new areas of customer demand.

A recent digital triumph was our new ‘bank-grade’ hybrid cloud system delivered in a hugely ambitious – and successful – timeframe of just 10 weeks. A visible customer component is our Quick Quote web and mobile tool, which allows advisers to provide quotes instantly using their mobile devices. While it appears straightforward, it’s anything but. It involved building and deploying key enablers – such as a secure virtual data centre in the cloud (Amazon Web Services), a modern integration and business process management suite – and a configurable pricing engine, modern APIs and user interfaces.

Technology team_resellernews

The technology project team (L-R) – Nick Stanhope; Andrew Scott; Patrice de Marigny; Raffaella del Prete; Tony Lees; Linda Nightingale; Richard Beamish. Absent: Corina Elama; Feng Wu; Ross Stephenson; Liviu Elama and Michael Ung.

The new investment will give Sovereign speed, flexibility and choice. It will enable data-led automation, coherent omni-channel customer experience, machine learning and artificial intelligence – all necessities for a modern and customer-centric business. It’s a small step in a much bigger journey toward making insurance more accessible to more people.

We are also using data to increase our understanding of customer risk, behaviours and needs. Recent analysis told us our customers wanted simple and flexible support after an accident. As a result, we launched Accidental Injury Cover this month. This product complements traditional income protection products and ACC by providing our customers with access to an immediate payment they can use however they wish, whether it’s hiring some help at home, taking taxis or having some time off work. This is available as an optional benefit with no underwriting regardless of whether someone is in paid employment or not.

In the last financial year, we paid out around $70 million in health insurance claims, which gave our customers access to the best medical treatment options. Demand for effective and less invasive options continues to grow in the private sector and we are seeing greater capacity as more specialists and medical facilities come online in New Zealand, particularly in the area of cancer care. We’re constantly looking into our claims data to ensure that our products reflect demand.

The ability to respond to, and even anticipate, the needs of our customers means we can make a difference through our product design, provide greater choice and simply improve the user experience.

Our eyes are constantly fixed on the horizon because we are in the business of being there for customers in their time of need – today and tomorrow.

Originally published as Sponsored Content in the NBR. Republished with permission.

A year in review – insights from our claims data.

Sovereign’s claims provides a snapshot into the health issues affecting New Zealanders. I dove into the detail of our $380 million claim payments for the most recent financial year to see what the data would reveal.

About 45% of Sovereign’s claims related to life cover payments for those customers who died or became terminally ill. Half of these claims related to cancer, 15% to heart attack, and 10% due to a stroke. Sadly, about 5% of claims related to suicide and this figure increases to 15% for those customers aged under 40.

Mental health is also a factor in around 25% of Sovereign’s income protection claims; on par with cancer and heart disease. A recent report released by the Royal Australian & New Zealand College of Psychiatrists estimated the total cost to the New Zealand economy of mental illness to be about $17 billion (7% of our GDP). As we look at these cold and hard figures, it’s easy to lose sight of the associated impacts on our families and communities.

Whilst insurers have some way to go to better understand mental distress and to develop more inclusive insurance options, I take pride in the great work that our claims team does in supporting customers to get back on their feet. Last year, we spent around $1 million on rehabilitation services to support our income protection customers in their recovery. This money was used to pay for psychological support, occupational physicians, and even exercise programmes.

When it comes to health insurance, we paid about $70 million to support customers to access medical treatment. There continues to be a trend towards more effective and less invasive treatment options, particularly in the area of cancer care, which represents 15% of total claims. It’s hard to believe that the first private radiotherapy clinic opened in New Zealand in 2008 and just ten years later, private funding has enabled New Zealanders to access state of the art medical treatment.

Gynaecological claims (such as endometriosis) were also significant – representing about 22% of total claims for females. Access to publicly funded treatment for these complaints can be uncertain but the conditions themselves are very common – for example, one in 10 Kiwi women will develop endometriosis throughout their lives.

Finally, we paid out more than $50 million in trauma claims to help customers recover from serious medical conditions. Whilst medicine has made major progress in treating serious illness, the costs of treatment and recovery can nevertheless be significant. Modern trauma products today cover over 60 medical conditions and yet over 90% of claims continue to relate to cancer, heart disease, and stroke.

When we look at these numbers, it’s easy to see that insurance remains just as relevant today in protecting New Zealanders against the financial impacts of death, illness, and disability. Nobody wants to claim on their insurance policy but it’s a relief to know that it’s there.