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Century Up

It all started in July 1999 when I took up this role with NZDIS. By the next month I was writing my very first article for the NZDA News. Now 20 years later this is my 100th article for the magazine.

My very first article revisited why in the age of big insurers did NZDIS still exist. Interestingly, 20 years on those reasons are as valid today as they were back then and when a group of dentists thought to set up their own insurance company in 1921.

Since I wrote my first article over 1200 students have graduated from Otago Dental School. Back then some of those dental students weren't even in primary school while now, others are closer to retirement than graduation. So, there are many members of NZDA who may not have read my very first article and certainly none who would remember it.

It's been an eventful 20 years and through all the change NZDIS has been able to maintain a constant position. It was set up by dentists, for dentists and governed by dentists.
It meets a unique need for the protection of a dentist and the dental practice. As was the case in 1921 and in 1999 and still today, NZDIS will provide a claim benefit payment for disability causing absence from as early as the first day off work. NZDIS is unique with this offer - all other insurers require a stand down period before a claim commences. That is, the insured carries all the risk during the stand down period. All other insurers require this stand down period to be a minimum of two weeks while four weeks is more common.

A practice owner will know that their absence has a financial effect on two things - their personal income and the running costs (business overheads) of the practice.
In the 20 years I have been serving the dental community I have seen practice revenues increase considerably. It is not uncommon for dentists to be generating patient fee income in excess of $600,000 per annum (circa $12,000 per week).

So, if an insurer requires a stand down period of up to four weeks then the lost revenue to a practice could be between $40,000 - $50,000 before a claim payment would be made. Using this example, NZDIS would insure up to $10,000 per week and pay from the first day of absence. That is, $40,000 would be paid before most other insurers would pay their first dollar.

Given most disabilities last for between 6-8 weeks the stand down period is a significant portion of most claim settlements.

There are many more features in the policy but the main proposition is how much is paid and from when. These were the issues confronting dentists in 1921 and still today.
No other insurer is likely to consider offering disability cover from the first day of absence and this is a key reason that the board of directors govern NZDIS to maintain the benefits for the profession.

The changes in the insurance industry (reflective of the overall direction of society) are greater compliance and consumer protection regulations which have increased the costs of managing NZDIS. Ensuring the longevity of a privileged offering and ensuring its affordability and profitability are the challenges faced today. Protecting and serving members is the priority and this past financial year members have been supported with claim payments of more than $1,000,000 - a first in our history for a 12 month period. NZDIS is proud to have helped members meet their financial challenges. And, at the end of the day, this is the essence of the business.

If I'm writing the same article in 20 years time, I'll be 74 - I wonder what the landscape will be like then?

Here are some of the facts from 1999 compared with today:

  1999 2019
Prime Minister Jenny Shipley (National) Jacinda Ardern (Labour)
NZ Interest Rates (OCR) 4.50% 1.75%
Annual Inflation (CPI) 1.50% 1.90%
Average NZ House Price $168,990 $686,050
Movie Of the Year (Oscar Winner) Shakespeare in Love Green Book
Average NZDIS Accident/Sickness benefit $2,240 per week $4,000 per week

 

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