KIWISAVER POLICY INVESTMENT INSURANCE MEMBER BOOKLET JUNE 2018 2017
AN INTRODUCTION OUR VISION AND STRATEGY WELCOME TO THE FINANCIAL SERVICES COUNCIL Welcome to the Financial Services Council of New Zealand. We are the peak body representing the financial services sector in New Zealand with a focus on insurance, KiwiSaver and investments. The FSC has 33 members as at 31 May 2018. OUR VISION Our vision is to be the voice of the financial services sector so that we can together grow, protect and manage the wealth of New Zealanders. OUR STRATEGIC INTENT We are commited to good policy and a sustainable growing market place with three areas of focus; 1. STRONG CONSUMER OUTCOMES The financial services industry must continue to deliver great products and services that deliver to the wealth, protection and wellbeing of New Zealanders. 2. SUSTAINABILITY 3. OF THE FINANCIAL SERVICES SECTOR The sector is key for the prosperity of New Zealand through the way we serve New Zealanders, to the jobs we create, to the insurance claims we pay and to the way in which we help people save for retirement. INCREASING PROFESSIONALISM AND TRUST This requires the industry to continuously improve, address the hard issues and increase the trust and transparency of the sector. POLICY & ADVOCACY INDUSTRY LEADERSHIP & INSIGHT VISION TO BE THE VOICE OF NEW ZEALAND S FINANCIAL SERVICES INDUSTRY STRATEGIC INTENT 1. STRONG & SUSTAINABLE CONSUMER OUTCOMES 2. SUSTAINABILITY OF THE FINANCIAL SERVICES SECTOR 3. INCREASING PROFESSIONALISM & TRUST OF THE INDUSTRY STRATEGIC PILLARS INDUSTRY BEST PRACTICE COMMUNITY OF PROFESSIONALS ANNUAL BUSINESS PLAN (THIS IS WHAT WE PLAN TO ACHIEVE EACH YEAR) DEVELOP THE FSC OUR VALUES: COLLABORATION CONSUMER FOCUS HONESTY & INTEGRITY AGILITY We hope this booklet will give you a clearer view of the scope of our work and the benefits of membership. Our objective is to present strong, evidence-based arguments for the policies that we believe are in the interests of the country, rather than solely for the financial services sector. Please join us on the FSC journey. OUR FIVE STRATEGIC PILLARS POLICY AND ADVOCACY Aim: To be the trusted voice of the financial services sector for the benefit of all New Zealanders COMMUNITY OF PROFESSIONALS Aim: A community developing itself to better understand and serve the needs of New Zealanders INDUSTRY BEST PRACTICE Aim: Showcasing industry excellence in understanding, growing and protecting New Zealanders wealth DEVELOP THE FSC Aim: A sustainable business model delivering an effective and efficient industry body Rob Flannagan Chairman Financial Services Council Richard Klipin CEO Financial Services Council INDUSTRY LEADERSHIP AND INSIGHT Aim: Bringing the industry together with knowledge and insight for the benefit of all New Zealanders 4 5
SPOTLIGHT ON INSURANCE KEY ISSUES Changing demographics and lower home ownership rates mean traditional triggers for insurance are changing High debt levels put pressure on disposable income and consumer appetite for savings New Zealanders are under-insured and those who need it the most cannot afford insurance Insurance market growth is plateauing. The insurance industry contributes significantly to the health and wellbeing of New Zealanders. So we need to bring the industry together to find ways to innovate and become more relevant to all New Zealanders 4.01 MILLION NUMBER OF INSURANCE POLICIES $2.52 BILLION 39% ANNUAL INSURANCE PREMIUMS 4.87 MILLION NUMBER OF PEOPLE IN NZ $1.22 BILLION CLAIMS PAID TO 31 DEC 2017 WERE TERM LIFE POLICIES $323 MILLION CLAIMS PAID TO 31 DEC 2017 (IN THREE MONTHS TO DEC 2017) (12 MONTHS) OF CLAIMS PAID SPOTLIGHT ON KIWISAVER KEY ISSUES The key issue is how we ensure the best retirement options for New Zealanders Research shows New Zealanders are under-prepared for retirement, relying on property, NZ Superannuation and KiwiSaver The KiwiSaver market includes active and passive management, together with a range of funds, fee and service options Our opportunity is to work with Government and consumer groups to find ways to help New Zealanders make wise and informed choices about their retirement By partnering to address financial literacy issues (both general financial literacy and investment literacy), we can help consumers help themselves By having fact and research-based conversations we can help Government help New Zealand $ $47.4 BILLION TOTAL KIWISAVER FUNDS $46.4BILLION MANAGED BY FSC/WSNZ MEMBERS 24.1% GROWTH IN FUNDS UNDER MANAGEMENT IN THE YEAR TO 31 DEC 2017 2.74 MILLION KIWISAVER MEMBERS 1.85MILLION MEMBERS WITH DEFAULT PROVIDERS 3.9% GROWTH IN KIWISAVER MEMBERS OVER THE YEAR NUMBER OF INSURANCE POLICIES 1,500,000 1,200,000 900,000 600,000 300,000 0 Sources: Financial Services Council Statistics, 31 December 2017 / Stats NZ Population Clock, 20 March 2018 CLAIMS PAID 12 MONTHS TO 31 DEC 2017 THREE MONTHS TO 31 DEC 2017 1 2 3 4 5 6 7 8 0 1 2 1 Whole Life & Endowment 2 Term Life 3 Guaranteed Acceptance 4 Trauma 5 Replacement Income 6 Lump Sum Disablement 7 Accidental Death 8 Credit Insurance $125million $100million $75million $50million $25million 1 Whole Life, Endowment & Annuities 2 Term Life 3 Guaranteed Acceptance 4 Trauma 5 Replacement Income 3 4 5 6 7 9 8 10 6 Lump Sum Disablement 7 Accidental Death 8 Medical 9 Credit Insurance 10 Group Insurance KIWISAVER CONTRIBUTIONS 12 MONTHS TO 31 MARCH 2017 $m $ 2000 $ 1500 $ 1000 $ 500 $ 0 Mar-17 Jun-17 Sep-17 Dec-17 Sources: Workplace Savings NZ Quarterly KiwiSaver Survey, 31 Dec 2017 $5.71BILLION TOTAL CONTRIBUTION FOR YEAR TO 31 DEC 2017 $1.37BILLION CONTRIBUTION IN THE THREE MONTHS TO 31 DEC 2017 $2,121 AVERAGE MEMBER 12-MONTH CONTRIBUTION $16,917 AVERAGE MEMBER BALANCE 6 7
SPOTLIGHT ON POLICY All FSC activity supports the delivery of strong and sustainable consumer outcomes, sustainability of the financial services sector, and increasing professionalism and trust of the industry. ACHIEVEMENTS IN 2017 / 18 We hit the ground running with a new strategy and a new team in early 2017. Outcomes from our work reflect the focus on implementing the new strategy and highlights are: CONDUCT AND CONSUMER OUTCOMES FINANCIAL SERVICES LEGISLATION AMENDMENT BILL CODE INSURANCE LAW IPSA KIWISAVER AND KIWIFUND BILL POLITICAL ENGAGEMENT Responding to all consultations to drive for improved access to high quality financial advice for New Zealanders. We believe changes driven by the Bill will help consumers make good choices about their financial wellbeing and develop a trusted industry where participants prioritise the interests of the consumer with transparent, simple, disclosure of interests. Close engagement with the Financial Advice Code Working Group to ensure outcomes that bring strong sustainable consumer outcomes balanced with increased professionalism of, and trust in, the industry. Responding to all consultations and engaging directly with the Government through the review of New Zealand s complex Insurance Law. Aiming to ensure that the Law reflects the consumer of the future and supports a strong and sustainable insurance industry. Engaging with the Reserve Bank on the review of the Insurance (Prudential Supervision) Act to ensure a good balance of cost and benefit. Working with Government and regulators to ensure that we build on the success of KiwiSaver as we celebrate the first 10 years of KiwiSaver s development. Our research shows New Zealanders rely on KiwiSaver and are asking for help and advice from the Government and industry to help prepare for a comfortable retirement. We are therefore leading the conversation on behalf of the industry though research and fact-based dialogue. Regular engagement with Government and regulators resulting in informed decisions for the good of New Zealanders. POLICY AND ADVOCACY Significant time and effort submitting to key industry consultations has helped develop our relationships with policy makers and government. We responded to all key consultations and completed 24 submissions, including on the Financial Advice Regime, KiwiSaver Fees, KiwiSaver Advice, Kiwi Fund, disclosure, privacy and the Insurance (Prudential Supervision) Act Issues Paper. FSC policy development is led by our Regulation Committee with support from the Tax Advisory Group for technical issues. Our relationships with government and regulators continue to strengthen, and we now meet regularly with the FMA, RBNZ, IRD and Ministers. Our member updates regularly provide insights on our policy and advocacy activity. INDUSTRY LEADERSHIP AND INSIGHT The FSC Code has been developed by members, for members and has now been approved by the FSC Board. Enhancing the quarterly statistics to become a spotlight series has begun to deliver meaningful insights. These insights will help us as we continue with our advocacy work. Regular member updates provide members with information on activity and outcomes. Evidence-based Growing the KiwiSaver Pie, Great Expectations: Retirement realities for older New Zealanders and Generation KiwiSaver resulted in future-focused conversations with Government, regulators, media, consumers and the industry. Our focus on building relationships with media is paying dividends, and we are seeing strong levels of take-up on proactive media releases. All FSC media releases are available at fsc.org.nz. INDUSTRY BEST PRACTICE For the first time, in 2017 the FSC and Workplace Savings NZ co-hosted a national two-day conference in Auckland. The conference showcased the big issues facing the sector and inspired delegates to Navigate the Change in their worlds. 2018 s Shaping Futures conference will lift the bar even higher. Celebrating success in the financial services industry, we re excited to bring you the FSC Awards. Launched in 2017, the awards showcase individuals who are truly making a difference for the financial services industry and the broader NZ community. 2018 winners will be announced at the Shaping Futures national conference. COMMUNITY OF PROFESSIONALS 13 committees, with regular schedules and robust governance are delivering great member engagement and the opportunity for those involved to broaden their networks and learn from their peers. Committee membership is open to all FSC members. DEVELOP THE FSC Building robust processes, websites and member data helps us be proactive and ensure a consistent voice for the industry. 8 9
THE FSC MEMBERSHIP MEMBERS BENEFITS OF MEMBERSHIP 1. ABILITY TO BE NOMINATED TO THE FSC BOARD The FSC Board is the governing body for the FSC, shaping policy direction and guiding the operational committees. AIA Insurance AMP Financial Services ANZ Bank Asteron Life 2. VOTING RIGHTS AT GENERAL MEETINGS Voting rights allow members to have a strong voice on the activity and direction of the FSC. Voting takes place at General Meetings on issues such as Board nominations, financial accounts and FSC Rule changes. BNZ Investments and Insurance Cigna Life Insurance Fidelity Life FNZ GenRe 3. CHAIRING-RIGHTS ON FSC COMMITTEES FSC committees are the engine-room of the FSC, where members actively engage to create outputs and outcomes shaping the direction of the industry. As Chair of a committee, you are able to shape and guide the development and execution of committee workplans. This allows you to demonstrate leadership and provide direction. Hannover Life Re Partners Life Pinnacle Life RGA Reinurance 4. INVITATIONS TO MEETING WITH GOVERNMENT AND REGULATORS Members are invited to join the FSC CEO and Chair in meetings with Ministers and Regulators, giving the opportunity to hear first-hand and ask questions direct to those who are shaping the future of New Zealand s financial services industry. SCOR Global Life Sovereign Ltd Swiss Re Westpac Bank 5. CONTRIBUTION TO FSC STRATEGY FSC strategy and Business Plan is regularly reviewed to ensure that we are delivering to our overall mission and strategic intent. Members have input to strategy and plan development, with the FSC Board having ultimate responsibility for FSC direction and focus. 6. EVENT DISCOUNTS AND INDUSTRY AWARDS A core benefit of membership is the opportunity to broaden networks, learn from peers and develop professionally. All employees and directors of FSC members receive substantial discounts on our leading-edge conferences, workshops and events. The Shaping Futures national conference and industry awards in September 2018 will celebrate excellence and bring the industry together to showcase the big issues facing the sector and challenge and inspire delegates. ASSOCIATE MEMBERS Bell Gully Bravura Solutions Ernst & Young Konnect Net NIB Morningstar Research KPMG Chapman Tripp Pricewaterhouse Coopers Melior Law Chatswood Consulting Strategi Group Melville Jessup Weaver Davies Financial & Actuarial MMC Ltd Trustees Executor VOTING REGULAR BENEFITS 1 11 NON-VOTING REGULAR BENEFITS 4 11 ASSOCIATE BENEFITS 6 11 7. INDUSTRY DATA AND INSIGHTS For those members that contribute to the Insurance and KiwiSaver statistics, member-only information is available at a more detailed level than is available publicly, providing additional data and insights. 8. COMMITTEE MEMBERSHIP AND FREE MEETINGS All FSC work is driven through FSC Committees where members actively shape the industry voice and policy direction. Our Committees give FSC members the opportunity to pool expertise and share learnings with other FSC members through regular meetings and teleconferences. Committees include Regulation, Tax, Life Insurance, Investment, Strategic Research, Distribution and more. 9. QUARTERLY MEMBER UPDATES Our quarterly newsletters provide members with information and insights on the industry and FSC activity. The newsletters contain information on policy and advocacy outputs and outcomes, events, committee activity and give members a chance to keep up to date and have a voice. 10. INDUSTRY SUBMISSIONS TO GOVERNMENT AND REGULATORS Proactive policy and advocacy engagement with submissions on all key consultations. Submissions are created in consultation with members via the FSC Regulation Committee. 11. ENGAGEMENT WITH GOVERNMENT AND REGULATORS The FSC team regularly gain insights into the thinking of policy makers and government, providing an interface with Government and regulators larger than on your own. The FSC s Regulatory Outlook provides members with a snapshot of current, future and past consultations. 10 11
BENEFITS OF BEING A MEMBER Membership means you have a key voice in the development of industry policy and activity. It provides you with the opportunity to shape the future of financial services here in New Zealand at a time of unprecedented regulatory activity. MEMBER BENEFITS INCLUDE: Proactive policy and advocacy engagement with submissions on all key consultations Shaping the industry voice and policy direction Gaining insights into the thinking of policy makers and government Broadening networks and learning from peers Insights from regular industry statistics Member updates providing information and insights Voting members are entitled to be nominated for the FSC Board, vote at General Meetings and chair FSC committees Member-only pricing for FSC events ADDITIONALLY, IN 2018/19, MEMBERS WILL BENEFIT FROM: The launch of the new FSC Code which will drive us further forward in lifting professionalism and trust in the industry. The Shaping Futures national conference and industry awards 6 7 September 2018 which will celebrate excellence and bring the industry together to showcase the big issues facing the sector and challenge and inspire delegates. To become a member of the FSC, simply fill out an application form [click here] or contact us on the number below. Financial Services Council of New Zealand Level 33, 23-29 Albert Street, Auckland, 1010 09 985 5762 fsc @ fsc.org.nz www.fsc.org.nz 12