What do you see as the biggest challenges for NZ insurers over the next 12 months?
Financial market fluidity.
2020 has seen immense change and new demands for insurers. Covid-19 has caused a great deal of disruption in the global markets that we rely on for return on capital and reinsurance, and we need to manage the possibility of that volatility leading to increased costs or new restrictions on our products imposed by international reinsurers.
Locally there’s been disruption, including to supply chains and access to international employees which increase the cost and challenges for businesses and I know brokers and advisers are working hard to support their customers with those challenges.
As an industry it’s important that we continue to maintain customer trust, and that we keep looking ahead to what will create value for the industry and our ecosystem in the long term. The recently announced natural disaster response model is a good example of where, despite the adversities of Covid-19, we have managed as an industry to progress a significant milestone that will deliver better outcomes for our customers.
What will be the challenges for Suncorp?
The challenge for us over the coming year will be to maintain momentum and agility in the face of uncertainty, and to keep our people engaged in a flexi-working environment.
The global impact of Covid-19 and the local lockdowns have created increased uncertainty and financial pressure for Vero’s customers and the brokers and advisers we work with.
We have a lot of work underway to continue to improve and build on our services and products for the benefit of brokers and customers, and we need to keep making progress on this while maintaining our financial strength and managing any business continuity issues created by Covid-19.
But there are opportunities to take what we have learned from Covid-19’s global impact. We need to be agile and continually look for new or different ways to improve the way we develop products, respond to claims, connect with our customers the way they want, and provide best-in-class customer experiences.
What are your immediate goals in your new role at Suncorp – are there any changes you’d like to see implemented within the next year?
One of my big focus areas as CEO is to continue to make us easier to do business with.
Brokers have experienced a shift in customer behavior, with increasing demand for digital connectivity and responsiveness, so their needs continue to evolve. We are continuously improving our digital capability, our efficiency and ensure that we provide a best-in-class experience.
Vero is putting a considerable amount of work into digital connectivity across the full policy life cycle, to find ways to make it easier for brokers to transact business with us.
We’re at a point where we can test some of the increased digitisation we are looking to offer and I’m looking forward to seeing the feedback and impact of this over the next 12 months.
I am also looking forward to seeing the benefits of the increased advocacy work that Suncorp is doing across our industry and the partnerships that we have with community organisations who support those in need.
Has the pandemic experience changed the way New Zealanders interact with their insurers?
When we went into lockdown in March, we implemented a consumer sentiment tracker to help us understand how Covid-19 was impacting our customers, and what their expectations of us might be. The research showed that consumers are more likely to be experiencing financial vulnerability, and that business owners, in particular, have been struggling to make ends meet.
The research showed that customers want us to support those in the community who are most in need – for example to use any savings we’ve made from the lockdowns to support charities or struggling local businesses. But there hasn’t always been an impact on the way our customers personally interacted with us. That might be because they don’t view themselves as needing help, but I think it’s more likely that they don’t always know that there is more than one way we can help them.
The onus is on our industry to change the way we interact with customers and make it easier for them to ask for help. Vero has taken the approach that the best thing we can do is help customers keep key insurance cover in place through financial hardship, so to that end we established a $10 million hardship fund and have been providing discounts and premium holidays for customers.
Brokers play a critical role in identifying which of our customers most need support and are working with us to ensure that customers are accessing our hardship fund if they need it.
What has been interesting is that Covid-19 certainly hasn’t changed perceptions of insurance. New Zealand customers might be a bit more likely to shop around for good deals or away from unknown companies back to quality brands that they trust and are familiar with. But during times of hardship they appear to be very aware that insurance is a big part of their financial resilience and cancelling it is an absolute last resort for many.
What lessons has Suncorp learnt, have changes been made to the business as a result?
We already had a clear priority to make our products, sales and service increasingly customer centric in line with changing customer expectations and needs. But Covid-19 has accelerated some of the changes that were already happening in these areas.
One example is our work around customers experiencing vulnerability. We’d done a lot of work on this programme and, in the first quarter of the year, almost all of our people had completed tier 1 training in how to recognise and support when customers might be experiencing vulnerability. That training came at the perfect time to enable us to better support our customers, and as much as possible we need to accelerate the work we are doing on this because we know that vulnerability is likely to become an growing issue. I’m looking forward to seeing some of this work start rolling out to brokers as well.
Another example internally is that for some time we have been promoting and building our flexible work culture, but Covid-19 accelerated our workforce plan and has also generated some insights that we are now using to adapt that plan. We’ve moved forward some of our digitisation work, with the intention to give our intermediaries better and easier access to our products and services, and to make us more efficient. New Zealand has moved rapidly from a really strong economic situation to a much more uncertain one. We need to continuously work to be as efficient as we can, so we can provide competitive pricing in an environment where our input costs are increasing.
How is Suncorp placed to deal with the regulatory change on the horizon for insurers, particularly FSLAA taking effect in March and CoFI?
Although FSLAA doesn’t have a big impact on us directly because we don’t provide financial advice, it does have a big impact on our intermediaries and we are doing all we can to support them to meet new regulatory standards.
The new CoFi conduct licensing proposal is something that we are actively working towards once it comes into play. It will create new obligations for Vero to comply with around fair conduct principles and a fair conduct programme.
Vero is in an excellent position to meet those obligations, because they align to our existing code of conduct and values, and with the programme of work we already have in place to deliver improvements in line with expectations from regulators.
What are you most looking forward to over the coming year?
One is spending more time with our people throughout the business. I’m lucky to lead a team of truly passionate people and I look forward to getting to know more of them as we shape our business for the future and continue to deliver more for our customers and intermediary partners Another is seeing more improvement roll out in the space of our digital connectivity with brokers.
We’re in a strong position to meet the challenges that might be coming, but I’m hopeful that New Zealand, our industry and our people, can look forward to a year of health, safety and certainty – hopefully unobstructed by Covid-19 outbreaks and lockdowns.
Before we put a line under 2020, though, I’m also really looking forward to spending time outdoors and with my family over the summer period – I think we all deserve a bit of a break!
