The man had lost his job due to Covid-19. He phoned his insurance company to talk about closing down his life policy.
During the call, the company discovered that the man – who was seeking to cut his expenses after the loss of his income – had given up smoking 18 months ago.
"That meant we could help him straight away," says Mark Wilkshire, Suncorp New Zealand's Executive General Manager, Customer Experience. "Because he was no longer a smoker, that made quite a difference to his premiums – and it meant he could keep his policy going."
That is the main message from leading insurance company Suncorp New Zealand – the company behind general insurer Vero and life insurer Asteron Life as the economic effects of the Covid-19 lockdown begin to grip: "Talk to someone – your broker, financial adviser or us,– there will be steps you can take to reduce your financial burden while still protecting the things that matter most," Wilkshire says.
New Zealanders' financial resilience has long been a catch-cry in the financial services industry, with insurance a key part of a financial formula including savings, lowering debt and the ability to withstand unforeseen emergencies like the coronavirus.
However, consumer insights from online researcher Yabble has shown Kiwis' financial vulnerability has increased by up to 10 per cent and is very likely to increase further because of the virus. Over a quarter of New Zealanders are already affected (or about to be affected) by job loss or reduced hours.
Four per cent have already lost their job, 14 per cent have experienced reduced income, while a further seven per cent expect to lose their job (or to reduce hours) very soon. There is a 10 percentage point increase in people who financially "struggle or really struggle to make ends meet."
Before Covid-19, it was nearly 20 per cent, now it's nearly 30 per cent. This is likely to increase rapidly, given at least seven per cent are expecting an imminent change in their employment.
While a natural instinct is for people to look at outgoings to see what can be cut, Wilkshire says: "I think it's true to say that Kiwis, when there is a national emergency like this, tend to go into themselves a bit.
"But we know from the research that most people are keen to hang on to their insurances. Home, motor contents and life insurance are among the things people would try the hardest to keep.
"Respondents indicated that home, motor and contents insurance are among the last things most people would cancel, compared to other ongoing services like pay-per-view, cleaning, DIY, and kids activities – with 66 per cent saying they'd only cancel it as a last resort, and 93 per cent saying they'd try hard to keep it.
"As for life and income protection insurance, of the 50 per cent of people who have life insurance, nearly half say they'd only cancel it as a last resort; 84 per cent say they'd try really hard to keep it."
Cancelling such policies could "come back to bite those people later on", says Wilkshire. "Those who've boosted their family's financial resilience are best advised to find ways to keep their cover at lower cost – but many don't realise there are different ways to do that.
"It's just like the many people going to the banks for mortgage relief," he says. At last count, over 70,000 Kiwis had contacted their bank to ask for deferred mortgage payments for six months or to move to interest-only to lower their repayments.
"We have similar flexibility to help people through this period, from structuring cover to cut costs or payment flexibility options depending on people's circumstances. Every situation is different so of course has to be taken on a case-by-case basis – but we can look at premium levels and other ways to keep the cover but lower the cost."
Among other measures was the ability to take into account family cars that were not being used during the lockdown. Additionally, if a vehicle's Warrant of Fitness or a driver's licence expired during this time, these factors would not impact the outcome of any claim a customer may have to make.
"We can only make adjustments if people get in touch. I can't say it enough – talk to your broker or financial adviser. This is when they come into their own – they know what to do and can leap into action if you contact them and get them on the case. That's the first step towards getting some help."
For more information: https://www.vero.co.nz/coronavirus.html