Regulation should be carrot and stick: Cameron

Any moves towards more regulation in New Zealand should consider the entire regulatory framework, not just what consumers want, AIA’s chief executive says.

Thursday, September 17th 2015, 6:00AM

by Susan Edmunds

AIA NZ boss Natalie Cameron said not doing that could mean New Zealand ended up with regulation that stifled the industry but did not help facilitate it.

It comes as her counterparts in Australia note a growing amount of insurance business being written through platforms, as advisers deal with regulation and a preference from clients for online access to their financial products.

“Advisers are increasingly finding platforms a simpler option to streamline administration and business efficiencies, while also providing easy access to client premium and claim data at the touch of a button,” said Pina Sciarrone, AIA Australia’s chief retail insurance officer.

AIA is running a discount campaign to reward advisers who write risk business through platforms in Australia.

Cameron said platform sales were set to make up 40% of insurance sales in Australia and that was likely to keep growing.

“The insurance is aggregated with super and investments, so it’s administratively easier for the adviser and the adviser can look at the client’s situation holistically in the one system. Tax effectiveness is a great benefit and reduces the cost of insurance for clients, as premiums are not coming out of the client’s pocket but rather from their platform contributions.”

She said it also opened up a new channel for financial planners and investment advisers to sell risk because they were already using a platform to manage investments.

“But it is really the retail super platforms that enable this in Australia. Without the tax concessions on super in NZ, one of those key benefits does not exist. That’s not to say it won’t still grow due to the other factors but it is one of the examples of the way in which we have neither the carrot (tax incentives, for example) nor the stick (heavy restrictions on advice and commissions, for example). If we move towards greater regulation here, I would call for consideration of the whole regulatory framework. Not doing that could mean we end up with regulation that stifles the industry but that does not help facilitate it – which is ultimately at the cost of ordinary Kiwis, whose access to advice and protection will suffer. “

Tags: AIA Financial Advisers