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Welcome to the KSL Insurance Pre-Claims Audit Service

My Journey to and from the Earthquake Claims Business

In September 2017 I decided to “wind down” my involvement in auditing and negotiating earthquake claims. If I am honest with myself, I just got sick and tired of  what I regard as the unethical behavour of the insurance companies in managing earthquake claims.
In 2011 when I initially set up the claims audit business it was to help my own KSL clients. I expected that we would be all “done and dusted” within 12 to 18 months. The reality was, it ended up consuming me! The business diversified into a specialist claims audit business which I operated for almost six years.

With the successful integration of the new shareholders from the Maurice Trapp Group into KSL Insurance I am delighted to now be embarking on the continuation of my first love – Life Insurance Auditing. Helping clients (before they have their claims) through my Pre-Claims Audit.

What the earthquake sequence has taught me as an insurance veteran of 48 years, is that the principles of good faith and Insurance integrity vanish when a disaster strikes at the heart of the profitability of an insurance company.

It has also taught me that most clients are unaware of the idiosyncrasies, fine print and interpretations of the language (“weasel” clauses) used within insurance products. They trust and rely on their adviser, bank officer, or online salesperson and assume they are receiving the correct advice and product for their particular situation.

The reality has been that many of the clients I have settled claims for, did not have the correct policy and/or did not receive the correct advice from their loss adjuster/claims manager/broker and would have been significantly disadvantaged if they had not contracted me to audit and negotiate their claim.

I have successfully settled over 300 claims. From 2014 the business kept extensive statistics on the last 186 claims which we recently reported to MBIE.

186 ClaimsTotal                Ave. per house
Offers received when KSL were initially appointed$53,781,946$289,150
Settlement offers negotiated by KSL Audit$134,875,218$725,135
Increase over initial offer$80,754,271$434,162
Average increase as a percentage per claim251%

What I Expect from Insurance Companies on Behalf of Clients

In my renewed life insurance audit role I have developed a very disciplined approach to the selection process for partnering with Insurers whom I am prepared to recommend and place my clients’ financial future certainty with.

Commitment  

  • I need to be satisfied that they are committed to the New Zealand Insurance market.

Claims Experience

  • They need to demonstrate with 10 years experience that they not only have the claims paying capacity to meet their claims, but the desirability to pay their claims.

Credit Rating

  • They must have an “A” or better credit rating. They must have a significant balance sheet, preferably with an overseas listed parent as the policy may be required for 30 or 40 years.

Future Underwriting

Clients must also remember that the current or next purchased contract may be their last opportunity to protect themselves. If your health, occupation, sporting or lifestyle habits change then the level of cover and future rates will be based on these then declared conditions.

Top Quartile Products

The insurer’s selected must offer products that are “top quartile” by the research house comparators with “best practice” definitions. For example heart attack definition mirroring the medical definition, any early stage cancer rather than limited to nominated cancer areas, e.g. prostate, breast, etc.

“Weasel” Clauses 

Clients need to understand or at least be aware of what the differences are in some of the terms expressed by insurance companies. E.g. passback upgrade benefits, cost ratchets in yearly renewable contracts. Differences between convertibility, premium freezing, level premium options and yearly stepped options. The financial difference between accelerated and stand-alone benefits. Terminal illness, loss of earnings vs agreed value vs indemnity, own occupation vs any occupation, automatic reinstatement. Any cancer vs specified cancers, heart attack definition aligning with medical definition.

Through the work that we have completed in the earthquake claims area and the observance of the public’s lack of understanding of good faith contracts, it has amplified the need for all New Zealanders to urgently undertake a life insurance audit to establish the appropriateness or otherwise of their insurance policies.

Most risk conscious people own some level of life, trauma, disablement, loss of income and/or medical insurance, but very few are aware of the “fine print” associated with these policies and the outcome of this ownership at claim time. That is why you need to have a talk with me.

Our Pre-Claims Audit System

  1. You provide me with an overview of your family circumstances and insurance arrangements. For this purpose, you can download our “Fact Find” document at the foot of this email.
  2. Based on the information you provide in the Fact Find, I begin the process of assessing the appropriateness of your risk management strategies using insurance to protect your family’s position.
  3. This includes an assessment by me of the appropriateness or otherwise of the level of insurance and the products you currently have.
  4. I will meet with you and present you with a “prudent person assessment” of the products and levels of cover that you should have based on this standard.
  5. In forming this opinion, I am having regard to my knowledge of the industry and the information you have provided me, particularly in relation to your perceived needs of protection for you and your family.
  6. I will identify products that meet our threshold of an insurer’s claims paying ability, their historic representations of their desirability to pay claims, the terms and conditions of the policy, the sums insured and the appropriateness to your current risk situation.
  7. Comparing and contrasting what you currently have with what I recommend.
  8. Making a decision if a revision of your insurance portfolio is required, having regard to your budget and your tolerance of risk.

Through my experience and audit expertise, I have developed a Pre-Claims Audit that can determine very quickly the appropriateness or otherwise of the products you own.
I am offering this service on a no fee basis.

If I identify deficiencies or inappropriate products (which occurs in the majority of cases), then based on my recommended product selection you will allow me to place the upgrade insurance product recommendations. I will receive a commission from the insurance company recommended.

The audit will involve you completing the Fact Find (that will need to be completed prior to our meeting) When we meet, I can immediately talk to your situation specifically (approximate / guesstimates are fine for assets and debt). Please have the details of your existing insurances if possible.

This data will allow me to provide you, at the meeting, with a Pre-Claims Audit of your current policy terms and conditions and the appropriateness or otherwise of the levels of cover and products based upon your financial information disclosed.

The report and insurance recommendations that I will present to you after the meeting will be written under the “prudent person” standard. The levels of cover and product will be what a prudent person with my knowledge of the industry and my knowledge of your disclosed affairs would purchase to adequately financially protect themselves and their loved ones.

The recommended products will be based on the insurers’ claims paying ability, their desirability to pay claims based on their historic reputations, the terms and conditions of the policy, the sums insured and their appropriateness to your current risk situation.
After considering all of these factors we then consider the premium cost and payment structure.

The Government concerns expressed in the recent Press article of the life Insurance industry’s standard of advice, would suggest that you owe it to yourself and your family to take advantage of this very valuable Pre-Claims Audit Assessment offer.

Insurance / n. certainty

I know the challenges that come with living a busy life whilst still being able to enjoy and protect the people and things you love the most.

Why, because I am just like you. AND… I have suffered a heart attack and three months later, totally unrelated, diagnosed with bladder cancer.

So if anything I have covered here does not make sense or feels a tad overwhelming, call me…that’s what I am here for.

I see my future role as making sure that:

  • You are confident that you and your family are protected, no matter what.
  • If something goes pear shaped, I’ll be in your corner fighting tooth and nail to get your claim paid.
  • You don’t need to worry, I am on your team so that you can get on and enjoy your life!

I will be contacting you over the next few weeks to offer you a no cost discussion. If you know that you need a Pre-Claims Audit and would like to speak to me earlier then please feel free to contact me to arrange an initial meeting.

Regards
Kevin

Contact Kevin to arrange an Insurance Audit
Download the “Fact Find” Document

 

New Directions and New Process

My Succession Planning at KSL Insurance

….2018 was my 48th year in the insurance industry. Other milestones included:

  • I turned 65 in May 2018.
  • I achieved a 3 year clearance from my bladder cancer concerns – I am now out to a six-month surveillance program only.
  • In September 2017 I closed the claims audit business to new claims. Through 2018 we have “run off” the majority of the outstanding claims.
  • Concurrently I have refocussed the business on its core activity “Life Insurance Auditing”.
  • I finalised my business succession plan.

 

New Ownership Structure

At the start of 2018, I finally conceded that I was no longer immortal and that I had an obligation to my loyal and valued clients to develop a long term continuation strategy. I commenced in earnest the development of a business succession plan.
I explored several options, from employing a successor, bringing in a younger partner, through to an outright sale. My personal desire was to retain an active involvement within the industry and preferably within the KSL business so that I was able to continue to service my existing clients as I do not intend to retire.

Introducing the Maurice Trapp Group

An outright sale was not my preferred option but was looming as the only option prior to being approached in September by the Maurice Trapp Group, a significant North Island based Insurance Brokerage, who were looking to expand their current South Island operation.
After an appropriate diligence process, I am delighted to advise you that I have sold 70% of my interests in KSL Insurance to the Maurice Trapp Group (Canterbury) Limited. The only change within KSL will be to the shareholding and management at a governance level. The KSL Insurance Limited name and business will continue in every other respect as is.  Brian Seque and I will remain as the principal advisors in the new structure. Sharon Empson will continue in her current role as office administrator and external director Jack Radford will remain as a director in the restructured business. Jack has recently retired as Dean of the Accounting Valuation and Economics Department at Lincoln University.

My Ongoing Management Involvement

My one condition of the sell down was that I wanted no management role. I was happy to act as a consultant to the firm but my focus for future involvement will be to work with my existing clients, developing new business and providing Insurance Audits to families and business owners.
Longer term, the enlarged company will be looking to integrate further agents and agencies into the KSL business. From a client perspective this provides long term certainty that you will continue to receive the professional advice and service that you have always obtained from your involvement with KSL over the past 38 years. We will keep you regularly updated as the new structure evolves. We will remain in the existing offices and all other services will remain the same.

My New Role

My new role will allow me to do what I love in my twilight years; being an Insurance Auditor and advise, match and place clients risk management needs with Insurers products that will meet their long term financial and risk management objectives. The earthquake sequence has shown us the “good the bad and the ugly” of Insurance from both a company and a policy perspective. As I have said many times over:
“Everybody owns Insurance but until a claim occurs most do not know what their policy covers, or how their Insurer will perform”
The fine print becomes the reality at claim time. You need to know what that will look like before the claim occurs and how it will impact financially on you and your family.

New Process

I have developed a new “Pre-claims Assessment” process. I will be offering clients a ‘no cost, no obligation’ meeting to share my claims audit experience with you and describe what will happen in the event that you, or your spouse or one of your children, or a business partner suffers from a partial and or total and permanent disablement, a trauma event such as a cancer, stroke or heart attack, or is off work through accident or illness and suffers a loss of earnings, or dies. This will be based on the facts you provide from my simple questionnaire that I will send prior to the meeting.
This “Pre-claims Assessment” will identify for you the financial impacts and outcomes from being inappropriately insured.

Real Life Case Study

The Value of a Life Insurance Audit

Recently I was contacted by a client now aged 48 whom I had negotiated a rebuild for. At the time I accepted the appointment to audit his earthquake claim (in 2014) he was currently reviewing his insurance program with an adviser. I audited the  insurances and proposal being recommended and advised the client that the products and covers were  inappropriate for his current circumstances (mortgage, wife, two teenage children and a toddler). In October 2018 the client contacted me after undergoing investigations resulting from a sore shoulder. He advised that he was going into hospital for surgery for a suspected cancerous tumor. The pathology after surgery confirmed as cancer.
When he rang me, he was unaware what his insurance program entailed.
I advised him that:

  • On surviving 14 days after the diagnosis from the surgery, he would receive $210,000 in a “stand alone” Cancer Trauma benefit.  (Now Paid)
  • If he was going to be off work for more than 90 days he would receive until he is 70 or until he is able to return to full time work, 75% of his current monthly income, inflation adjusted.
  • If he ultimately died, his wife and family would receive a further $1.1 million dollars of life insurance proceeds.

The relief in his voice on hearing this news makes my audit role the most satisfying part of my job. Had he not undergone my Audit process and retained the existing contracts and advice, he would have received $104,000 of “accelerated” trauma insurance (accelerated means that on payment the life cover reduces by the payment amount) and the $334,000 of life insurance would have reduced to $230,000. There was no income protection benefit.

This is a typical example and is valid reason why, for peace of mind, you should immediately review your current situation.

 

Ongoing Reviews

We recognise that times and circumstances for most have changed and it is my intention to recommence our peer review program.

From the information gathered from each client interview, Jack, Brian and I will review your information, and provide a collaborative recommendation based on the pre-claims assessment model. We will present in documented form, our recommendations for retention, alteration or change.

Jack will consider each case from a financial management perspective and Kevin and Brian will consider each case from an insurance claims, product and company perspective.

This model was the basis for the success of KSL Insurance prior to the earthquake sequence and will be reinstated immediately.

I look forward to undertaking a peer review Audit of your current situation.

Please email me at kevin@ksl.co.nz for a suitable appointment time. We will send you an information update memorandum for you to complete together with a disclosure authority to contact the various insurers to be able to complete the initial pre claim assessment.

Regards and best wishes for a prosperous 2019
Kevin Seque

 

This commentary is the first of a series of topical issues and discussions for clients to consider as part of their personal and/or business risk management.

 

 

Yes, I/we wish to undertake an Insurance Audit with KSL Insurance

 

 

 

 

Copyright © 2019 KSL Insurance Ltd, All rights reserved.

Christchurch’s Earthquake Nightmare continues…

There is much to do in Christchurch, but there is also much to do to ready ourselves properly, effectively and efficiently now, to ensure that the problems of Christchurch never again be the problems that any other New Zealanders needlessly has to endure.
The changes suggested need political intervention and a will from politicians to “do the right thing” for ordinary New Zealanders. Ask Your local Politician what they intend to do to fix this problem.
– Kevin Seque