Vax chat hits a raw nerve - advisers can do better
It seems a recent article on Covid-19 and underwriting the unvaccinated hit a raw nerve with some readers, and the responses across the Good Returns site raised an eyebrow or two.
Tuesday, November 30th 2021, 10:03AM 
1 Comment
by Jon-Paul Hale
What struck me, and I had a few of my own comments on it, was the various differing views of the same data. (Read the original article here and click here for the follow-up article.)
Interpretation of data is a significant part of what we do as advisers, and that needs to be accurate, but we aren't explicitly trained on this stuff - it's assumed that you will bring it with you.
Most advisers had another career before becoming an adviser, but there may still be significant knowledge gaps.
Are we going to get it right every time? No. But we need to do better than simply disagreeing when looking at the same things. This flows through with maths and statistics skills as well as reading policy wordings and understanding how products work.
We have a challenging role in arranging insurance cover for people, as one approach isn't necessarily correct for the next client.
So we have to approach advice with a data-driven model that adapts to changes in the client presentation.
It is well known that humans do not do fractions and percentages well, these concepts are not natural visualisations for people. The perception of numbers as a fraction or percentage is often skewed.
You can look at 10,000 people and say that's a lot of people because that is how our brains are wired. At the same time, that's still only 0.2% of the New Zealand population. Our brains can play silly tricks on our perceptions - it's not a lot by proportion.
As the data builds around Covid-19, I've seen many anchoring and confirmation biases with what's being said. Data and information that wouldn't have been questioned in 2019 are now decried as inaccurate and fraudulent, but there's no evidence it is.
And the same goes for the insurers and underwriting but in a slightly different way.
Have the insurers been asking the right questions, and do they have their ducks in a row?
Naomi and Partners Life appear to be, the rest I'm not sure of - they have been pretty quiet with their non-committal responses, which raise more questions than answers.
Most people don't do detail, and when they do, they don't do it well, or they end up in analysis paralysis.
So rules of thumb and past patterns are used as the framework and guide, and we often have the perception we have the perfect system until something unexpected gets thrown in the mix, then it breaks.
Underwriting is a lot like this and it tends to overreact to events that increase risk before settling down.
The more specific one is the industry's approach to HIV and AIDs, with some policies still being very draconian while others don't much care so long as you didn't have it at underwriting. More evidence that things aren't reviewed and adjusted with the data as it changes.
We as advisers need to be better at this - it's where the real value of advice comes from.
Covid-19 is likely to be a bit like this, as we saw last year with the initial knee jerk reaction followed by softening of approach and then this year little to no changes with the latest lockdowns for underwriting rules.
The data is showing that vaccine injuries aren't the issue many are making noise about. Claims aren't increasing because of it, and many external indicators are not rising against the suggested noise either.
But Covid, the virus, is having an impact, and we need to be prepared to weather a storm on claims and the premium changes that will follow.
We're going to see a change in underwriting as a direct response to Covid, be it the local experience or changes in the rule book from the reinsurers and their experience overseas.
We know the delay in the Tokyo Olympics had a massive impact on reinsurers, it was a bet they never expected to have called in, and they didn't price for it. Everyone ended up feeling it with their insurance premiums, life insurers included, when that rolled through last year.
The reality is that while Naomi talked about underwriting changes, existing policies don't have things that can be changed, only the underlying product premium.
This means that Covid pricing impacts on insurers and reinsurers will flow through to increased premiums for existing policyholders, and we will have to manage that.
When it comes to licensing, as it eventually will, we'll have to demonstrate that we have an approach that reasonably manages all of this, puts the client first, and can be qualified and audited.
Just another thing that needs to be on this list, that is already pretty long, when it comes to things to be watching out for.
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When you inject a religious perspective it behoves the individual to stick to the story - to keep speaking to your tribe.
I discovered one staunch opponent was certain he was right about one fact that was soon going to be proven without a doubt. When asked to place a small wager on his position he headed for the exits.