Zurich Financial Services Australia (Zurich) has announced the launch of a new, industry-first Total and Permanent Disability (TPD) offering designed specifically to cover ongoing care requirements in the event of a severe accident or illness.

TPD cover provides a lump sum payment if an individual becomes totally and permanently disabled and is unable to work. 

Zurich’s new ‘Continuous Care’ option allows for a more tailored TPD solution by providing specific cover in the event of more severe accident or illness that requires ongoing support from a carer – whether provided by a professional or a family member – and/or modification of an individual’s home or vehicle.

‘Continuous Care’ is designed to improve the affordability of traditional TPD products by allowing individuals to better structure their cover to meet their financial needs.

Jacqui Lennon, Head of Retail at Zurich said: “Advancements in modern medicine, paired with significant changes to the makeup of Australia’s workforce, have led to almost 80 per cent of Zurich TPD claims* not requiring ongoing, continuous care.”

“This landscape shift, paired with cost-of-living pressures, has created the need for a modern TPD solution that provides customers with more control over the structure and affordability of their cover,” Ms Lennon said.

The launch of ‘Continuous Care’ comes as part of a broader suite of changes to TPD and Income Protection products across the Zurich and OnePath brands, including: changes to assessment periods; improved rehabilitation offerings; and simplification of definitions and premium labels.

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Justin Delaney

Zurich Financial Services Australia (Zurich) recently convened the inaugural meeting of its Mental Health Roundtable, a bi-annual forum of key academic, clinical and civil society representatives to discuss key trends and areas for greater collaboration with the life insurance industry. 

Attendees discussed recent developments Zurich has pursued in relation to utilising Artificial Intelligence (AI) to identify key mental health factors. Recent academic research was also presented, together with an exploration of the issues contributing to a growing prevalence of mental health conditions in Australia and factors for driving improved resilience.

The forum also explored mental health-related challenges and opportunities within the life and health insurance sectors, with a view to improve customer outcomes and opportunities for greater collaboration.

Justin Delaney, Chief Executive Officer, Zurich Australia & New Zealand said: “Mental health is obviously a critical issue for individuals, our society and the broader economy. As a leading global insurer and one of the largest retail life insurers in Australia, Zurich continues to witness the rising and profound impact of mental health issues across the breadth of our diverse customer base.” 

“The rich discussion and shared insights from this forum are an encouraging sign. No one wants insurance to be a barrier to individuals seeking and receiving the appropriate advice or care.”

“We hope and expect this bi-annual roundtable will act as an important advisory mechanism, promoting more meaningful engagement and understanding across both the mental health and life insurance sectors to support improved resilience,” Mr Delaney said. 

Professor Alison Calear, Co-Head, Centre for Mental Health Research, The Australian National University (ANU) said: “Research shows that the prevalence of mental health conditions continues to rise, particularly for young Australians.”

“The drivers of poor mental health and the changes required to improve it remain very complex. Forums like this are an incredibly important opportunity to share unique insights and perspectives in order to adequately address this growing issue,” Professor Calear said.

Belinda Elworthy, Chief Executive Officer, Gotcha4Life Foundation said: “In a landscape that can feel increasingly complex, it is connection, commitment and collective action that can help us to drive meaningful change. I appreciated the opportunity to come together and share insights and diverse perspectives.’

Dr Daisy Brooke, Chief Executive Officer, Mental Health Professionals Network (MHPN) and Tackle Your Feelings Steering Committee member said: “The roundtable was a fantastic opportunity for stakeholders in the sector to collaborate and share insights around the evolving nature of mental health presentations in the Australian community.”

“Zurich’s ongoing commitment to host a forum dedicated to discussing research and innovation in mental health is an example of the leadership they are showing in the financial services industry,” Dr Brooke said.

Approximately one quarter of Zurich life insurance applications include a disclosure for a mental health condition. Mental health was the third most common cause for claim at Zurich in 2023, representing close to one in five claims*. For some Zurich retail life insurance products, mental health accounted for up to 35 per cent of claims, representing one of the most common reasons for claim. 

The inaugural Zurich Mental Health Roundtable was attended by:

• Professor Alison Calear, Co-Head, Centre for Mental Health Research, Australian National University (ANU) College of Health and Medicine
• Katherine Newton, Chief Executive Officer, R U OK?
• Jackie Hallan, Director of Service, ReachOut
• Belinda Elworthy, Chief Executive Officer, Gotcha4Life Foundation
• Dr Simon Benson, Clinical Director, Bupa
• Dr Daisy Brooke, Chief Executive Officer, Mental Health Professionals Network (MHPN) and Tackle Your Feelings Steering Committee member

Zurich Executives in attendance included: Justin Delaney, Chief Executive Officer; Jacqui Lennon, Head of Retail; and Matt Paterson, Chief Claims Officer.

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Zurich Financial Services Australia (Zurich) has announced the conclusion of the first phase of its collaboration with the University of Technology Sydney (UTS) to develop Artificial Intelligence (AI) models designed to streamline its ability to underwrite life insurance applications.

Following more than six months working alongside UTS Rapido, a research and development hub at the university, the AI models will allow Zurich to make an immediate underwriting decision on applications with mental health disclosures without the need for a doctor’s report, which previously would take as long as 22 days.  

Jacqui Lennon, Head of Retail, Zurich Australia & New Zealand said: “By using AI models to assist the underwriting process, Zurich can reduce the need to access doctor’s reports, eliminating significant friction within the application process and reducing applicant concerns around privacy.”

The models, which draw on anonymised data from seven years of past applications, identified factors correlated to a mental health exclusion being placed on an applicant, including:

• Lack of participation in sports, pastimes or recreational activity;
• Occurrence of any ongoing health issues beyond mental health, such as chronic pain, cancer or heart disease;
• Time spent in hospital or having medical treatment during the past five years; and
• Having biological parents or siblings with a health condition, such as diabetes, cancer or heart disease.

Currently, around one quarter of the life insurance applications Zurich receives include a disclosure for a mental health condition. In 2023, Mental health was the third most common cause for claim at Zurich, accounting for 20 per cent of all claims and resulting in $255m in claims payments*. For some of Zurich’s retail life insurance products, mental health becomes the first or second most common reason for claim, accounting for up to 35 per cent of claims in some cases.

John Kim, Chief Data Officer, Zurich Australia & New Zealand said: “Using AI allows Zurich to analyse thousands of data points, which would not be possible for a human to do. This project is a key step in Zurich’s journey to being Australia’s leading digital insurer, and importantly, it allows us to provide protection to more Australians at a time when they need it most.”

“Beyond underwriting, the models’ findings will also be key in guiding the continued delivery and evolution of Zurich’s preventative health and wellness offerings. In future, and data-prevailing, models like these could potentially also be used to analyse and improve the underwriting of conditions beyond mental health, such as cancer, cardiovascular or musculoskeletal conditions,” Ms Lennon said.

The AI models will be used to verify decisions made by Zurich’s underwriting team and the existing rules engines they use, in keeping with Zurich’s AI philosophy to ‘always keep a human in the loop’.

———–

*Total for direct, retail and group insurance, inclusive of OnePath

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Jacqui Lennon

Zurich Financial Services Australia (Zurich) has released new research demonstrating, among other findings, that more than 80 per cent of Australians have made personal, financial and lifestyle sacrifices over the past year due to cost-of-living pressures driven by inflation and rising interest rates.

The research, based on an annual survey of more than 1,000 individuals across the country, was conducted independently on behalf of Zurich to uncover the financial pressures facing Australians and the impacts on their decision making, attitudes and overall financial security.

In addition, the survey found that:

• nine in ten respondents have been impacted by recent rate rises
• nearly one in three respondents do not have a financial black up plan
• one in four respondents have little or no confidence in making financial decisions, and
• one in five respondents have little or no knowledge of basic financial concepts like insurance.

In response to the findings, Zurich has launched an insurance affordability resource designed to educate customers on how they can control their insurance cover to ease cost-of-living pressures whilst ensuring they remain protected.

Jacqui Lennon, Head of Retail, Zurich Australia & New Zealand said, “Despite experiencing financial pressures, many survey respondents had not downgraded or cancelled their life insurance, demonstrating the value Australians place on insurance and their reluctance to lose the peace of mind it provides.”

Using specimen customer case studies, the resource demonstrates how a typical customer may alter their insurance by adjusting their cover, settings and options, how premiums are paid, their lifestyle choices, or pausing cover altogether.

“As cost-of-living pressures escalate, it’s more important than ever that people feel confident and in control of their financial situation. Our new affordability resource is just one way we are supporting customers to gain this confidence so they can ensure their lives and livelihoods remain protected despite the uncertainty of the world around them,” said Ms Lennon.

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Zurich Financial Services Australia (Zurich) has announced that Australian insurtech start-up, ‘Kanopi’, had won the Australian round of its global Innovation Championship for its innovative customer-facing software platform designed to empower insurers and their customers.

In its fourth year, the Zurich Innovation Championship offers start-ups the opportunity to work with Zurich on solutions to solve key challenges within the insurance sector. In 2023 these were identified as: customer experience; commercial insurance; distribution partnerships; digital enablement; and sustainability.

Australian winner, Kanopi, is a cloud-native, data-driven platform that uses modular, low code software to help insurers create, manage, distribute, embed, and scale new products to customers.

Jacqui Lennon, Head of Retail, Zurich Australia & New Zealand said: “As an insurer, we understand how quickly risks can change. Investing in innovative, digital solutions is incredibly important to ensure we are evolving at the same rapid pace and can continue to serve customers to the high standard Zurich is known for.” 

“The Zurich Innovation Championship provides a fantastic opportunity for us to support start-ups on their journey, propel their solutions and fresh ideas to market, and have a significant positive impact on our industry, customers and community,” Ms Lennon said.

Nigel Fellowes-Freeman, Chief Executive and Founder of Kanopi said: “We are incredibly excited to win the Australian round of the Zurich Innovation Championship – and at the prospect of Zurich’s support to really scale our product offering to the next level.”

The 2023 Zurich Innovation Championship attracted a record number of submissions, confirming its status as one of the largest startup events in the industry. Globally, the competition saw a record 3,500 applicants – up from over 2,600 last year – with the Australian round receiving over 100 entries.

Kanopi will now present to Zurich executives in Switzerland at the global round against other national winners from across the world. The overall global winner will then enter a four-month accelerator program to test their solution, receiving up to USD100,000 in funding and up to USD120,000 for software and cloud support services.

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Jacqui Lennon will join Zurich Life & Investments in February 2021 as Head of Customer & Digital. Jacqui is an experienced leader and brings a diverse range of industry experience leading product design, strategy and digital development. Jacqui is well placed to lead Zurich’s proposition development and design, as we respond to the challenge in disability income insurance and seek to offer truly differentiated and sustainable products to our customers.

Kieran Forde will commence in the role of Chief Distribution Officer at the end of November. Kieran joined Zurich from ANZ in 2018, and has held roles as Head of Bancassurance & Direct and Head of Zurich Propositions. This experience within Zurich is backed by more than 20 years’ experience at ANZ, including as Head of Wealth Solutions & Partnerships and Head of ANZ Financial Planning.

Justin Delaney, CEO of Zurich Life & Investments, said, “Both Kieran and Jacqui have a reputation for collaboration and creativity.  Their appointments, alongside those of our other executives and the distribution leaders we have in Nathan Taggart and Tim Atley, will support our commitment to partnership and adviser service.”

Also joining Zurich as Head of Strategy is Shaneen Marshall. Shaneen will lead several critical enterprise wide projects and will drive Zurich’s long-term strategy, particularly as a much larger and integrated business since the acquisition of OnePath Life. Shaneen joins Zurich from TAL where she was most recently Integration Insurance Business Director.

Next week, Daniel Longden joins the Zurich business as Chief Financial Officer, an appointment which was announced in September 2020.

“We are delighted to appoint Jacqui, Kieran, Shaneen and Daniel to these important roles. They will help to drive Zurich’s commitment to offering high quality, differentiated products for our customers and partners, which is core to our strategy and the reason we continue to invest in the OnePath and Zurich retail brands,” said Mr Delaney.

This cycle of appointments will ensure Zurich has leadership with a strong bench-strength, commercial acumen, and specialised expertise, whilst also reflecting our values of diversity, determination and forward-thinking. This will assist us in continuing to advocate for advisers and the industry to help guide Australian life insurance to a positive future.

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This announcement follows the launch of Allianz Retire+ Australian market-first solution, Future Safe, in March 2019. Future Safe is designed specifically for retirees and offers a simple way to access growth via returns linked to the sharemarket, with inbuilt downside protection to assist with managing the effect of sequencing risk on retiree portfolios.

In partnering with Investfit, Allianz Retire+ has the ability to offer financial advisers a portfolio construction tool that demonstrates how Future Safe can be effectively combined with other investments to provide greater certainty of outcomes. It also allows advisers to offer clients a higher degree of overall confidence when setting their individual retirement goals, with a more realistic understanding of what income they will be able to draw over their expected lifetime.

Jacqui Lennon, Head of Product and Customer Experience, Allianz Retire+ commented: “What we know is the number one fear retirees have is running out of money, in fact, they fear that more than death. So that is the number one risk we need to manage”.

“Traditional advice is often modelled against expected average investment returns, which offer about a 50% chance of achieving the projected retirement outcomes. That’s 1 in 2 clients that will have an outcome worse than what was presented. This tool is completely unique in its ability to offer advisers an extremely accessible way to give retirees greater peace of mind, while improving adviser efficiency in producing almost instantaneous results for hundreds of portfolios”.

Commenting on the partnership, Investfit Founder and CEO, James Claridge stated: “We are particularly delighted to be partnering with Allianz Retire+, an innovator in retirement funding and backed by global powerhouse, Allianz. The Team at Allianz Retire+ have developed Future Safe, a solution that enables retirees to continue to gain exposure to returns linked to Australian and Global shares whilst limiting the downside risk, which might otherwise threaten their retirement outcomes. We appreciate that Allianz Retire+ have chosen Investfit as their preferred tool to help advisers deliver great outcomes for their clients”.

Future Safe projections at different confidence levels

In recognition that advisers need to solve for portfolio longevity with adequate growth exposure and meet client confidence demands, the Investfit tool shows how Future Safe can be combined with other investments to generate potential returns for a client for a given level of short term risk. Investfit’s stochastic modelling runs portfolio simulations based on various inputs regarding financial position and goals – such as age, asset allocation, legacy and life expectancy – to a desired level of confidence. While the default for Future Safe simulations is set at 90% confidence, it also has the flexibility to be compared at 95%, 75% or 50% confidence that individual retirement goals will be met. These confidence levels are an estimate only given all financial projections used in the tool are based to some extent on historical data and therefore subject to uncertainty as the future may well be different to the past.

However, unlike traditional portfolio construction methods, Investfit leverages sophisticated technology to allow for variances in investment returns from year to year and takes into the account the fact it is not unusual to have a sequence of poor returns over a number of years. Investfit projects these variations and also takes into account the correlations between interest rates, inflation, property prices and share prices — that is, the tendency for them to move together or in opposite directions. Investfit also allows advisers to model a large number of possible strategies, rather than just the one that has been selected by default or based on a subjective “risk” questionnaire.

Lennon added: “Our Future Safe Investfit illustrations show modelled projections across over 1000 scenarios including selected income drawdown rates at a chosen level of confidence. This then arms advisers with projected data to demonstrate the impact of adding Future Safe into retirement portfolios to assist with mitigating sequencing risk, meaning retirees have higher confidence that they won’t run out of money”.

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Joanne Earl

Allianz Retire+ has announced a research partnership in conjunction with Macquarie University, focused on better understanding the impact of a range of inputs to pre-retirement advice in order to ensure everyday Australians get the retirement they deserve.

The three-year research project – ‘Improving Retirement Planning, Decision Making and Adjustment: Towards a Holistic Model of Advice’  – will be led by Associate Professor Joanne Earl of Macquarie University in collaboration with Allianz Retire+, and will work with Australian retirees and financial advisers to measure adjustment or ‘happiness’ in retirement as a result of receiving holistic advice.

The study extends earlier research conducted by Associate Professor Earl (published in the Journal of Vocational Behaviour) that looked at the importance of resources or ‘buckets’ – health, wealth, social, cognition, emotional, and motivational factors – in helping to understand what keeps people well in retirement.

In the latest iteration of her research Associate Professor Earl places greater significance on the timing and conditions of work exit. The project team plans to practically apply the resources model, engaging clients in training and discussions about planning for retirement, specifically looking to incorporate career, finance and health advice when thinking about retirement.

“We think the conditions of exit are a really critical part of the retirement planning decision process. We know that there were 177,500 people who said they were retired in phase one who were back out looking for work in phase two according to successive waves of the Multipurpose Household survey. The primary two reasons for why this was happening was because they were worried about money and they were bored.  That says to me, the question about timing is not as self-evident as you might think,” stated Associate Professor Earl.

This new project will track Australians transitioning to retirement, as they are guided to plan their exit or reconceptualise their participation in the workforce, allowing them to revise their plans with each new input of advice.  It will research the impact of active planning across different buckets when transitioning to retirement.

“Rather than just financial advice, early on in the process, we’ll be introducing people to careers counselling or careers advice, as well as a medical assessment to challenge their thinking about health. Helping people to go through that decision-making process before they start talking to a financial adviser

will give people a lot more information to work with. Those people that have been through this process should make better-qualified decisions than those people that are in a control group,” Associate Professor Earl said.

The project will also look to assess the added value of individual advice and will test the efficacy of more flexible models of delivery such as online and robo-advice compared to the traditional face to face, seeking to determine how these elements may work together to assist people in transitioning to retirement.

Jacqui Lennon, Head of Product and Customer Experience, Allianz Retire+ believes this research has the potential to redefine the way advice is delivered to retirees: “Our partnership with Associate Professor Earl and Macquarie is a hugely exciting prospect for our business. This research has the potential to rescript how we approach retirement advice, so as an industry, we are creating confidence for Australians in retirement.  We know from speaking with retirees that when it comes to making decisions about their retirement, it’s never purely a financial conversation.  It’s emotional, philosophical and financial. This research should define exactly what trusted advice looks like and will provide insight into what role advisers can play in setting up people for a happy retirement. Post Royal Commission, many advisers are struggling to define their value proposition, and with 1,000 Australians retiring a day, there has never been a more pressing need to undertake this research”.

If the research is successful, then it should see a difference in retirement adjustment for those that have been through the process compared to the control group.  It is expected that participants will have made better decisions, having taken into account different scenarios increasing their confidence in the choices they have made. Overall their retirement will have met or surpassed their expectation.

Associate Professor Earl explains: “After going through the process of reviewing their health, career and financial goals, we should expect retirees will be able to make more informed choices and will have revised their plans as a result. This should lead to them increasing their adjustment in retirement and overall see them having happier retirements.”

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