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

MARKET – KEY QUESTIONS
1. 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 QUESTIONS
Q: 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 household
http://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

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

DISTRIBUTION
1. What proportion of the personal (life, IP, trauma, and TPD) insurance
market is sold by advisers?
2. How much is direct?

DISTRIBUTION
1. 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

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. Number
Price /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

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

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.

Chatswood Data Services for Insurance Industry Participants

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