Insurers: Robo won't replace advisers

New Zealand insurers are at pains to point out that they want to focus on human advisers – even as development work continues on robo solutions.

Friday, January 19th 2018, 10:08AM

by Susan Edmunds

The FMA is planning to offer an exemption this year that will allow personalised roboadvice, before the Financial Services Legislation Amendment Bill is passed, which will clear the way.

The exemption will allow roboadvice on personal insurance products.

Good Returns asked insurers what their plans were to develop robo offerings this year.

A Sovereign spokeswoman said it recognised the role digital advice could play in improving access to insurance for New Zealanders, “particularly when offered as a complementary service to face-to-face advice. Our focus remains working closely with our valued partners and we support a number of businesses that are developing their digital advice capability.”

A Fidelity Life spokesman said it was following roboadvice developments very closely.

"One issue of particular concern to us is the level of under-insurance in New Zealand," he said.

"This means people’s biggest asset – their ability to earn income – isn’t protected when circumstances change, and this can place huge financial pressure on families. Roboadvice has the potential to help bridge the under-insurance gap and should be permitted and encouraged where it provides consumers with more choice and access to good quality advice.

"While we believe that roboadvice cannot deliver the same value as a long term relationship with a professional human financial adviser, it may allow consumers - who would otherwise remain under-insured – to have easier access to advice and insurance protection. Empowering consumers with choice is beneficial for the whole market."

Partners Life and AMP’s answer to the question of whether they would use the exemption was redacted when submissions on the proposal were published, indicating commercially sensitive plans may have been included.

But at AIA, executive general manager Graeme Edwards said there was no development under way. “It’s a space we are monitoring but our focus is on existing human-advised distribution."

Tags: Life insurance roboadvice