[GRTV] Time to change debate on replacement business

GRTV: I thought it was about time we had an adviser on the show because we haven't had many financial advisers on Good Returns TV so I'd like to welcome Kat Church from the Insurance People. She has this great title of head of client engagement so not just an adviser anymore.

Church: No. All about trying to improve the client experience. Thanks for having me.

GRTV: It's great to have you here and we're going to talk about MDRT later on as well because you're the chair in New Zealand here. First up, the hot topic – replacement business. So why do you think we need to change the conversation around replacement business and make it more positive than it's been?

Church: All we hear at the moment is the churn debate but there isn't actually any conversation going on around the good reasons why business replacement should occur.

There are very old policies that are sitting out there that aren't serving our clients. The policy wordings we have today are so much more flexible, but we're not actually discussing that. Setting a standard, helping our clients de-risk and just making sure that they have a better outcome.

GRTV: A lot of the negative stuff is coming from people like the regulators and the FMA and people like that. Do you think they actually understand the issues?

Church: No. Look full respect to them, they're in a position that they need to be in, but I'd really love them to come and walk in my shoes. Walk in my shoes when I have a phone call from a client who has breast cancer and I have to sit there and think which wording is she on? Is it stage two? Is she going to get a full payout on her trauma cover or is she not going to get a full payout on her trauma cover because the reinsurer's changed and the wordings aren't improving. And so I'd love them to walk in our shoes a little bit to sort of understand why there is good business replacement.

GRTV: Do you think it is as big a problem as they make it out to be?

Church: No. Look, there are some claims in the industry that do not get paid because someone has moved someone from one insurer to another. It's going to happen. We've got to learn how to mitigate that, how to de-risk that. And that's the message I think we should be talking about.

GRTV: So what is good practice around replacement business?

Church: Oh my brokers love me for this one. So we've got a really, really robust process and it's hard for some to actually follow, I'll be honest. There's a big engagement around what covers they do have. Really good analysis around whether or not it's fit for purpose. All of our statements of advice will actually offer staying where they are as well as improving their situation to potentially other insurers if it warrants. But when we get into the actual underwriting stage that's where all the information comes out.