Dollar dives as share­mar­ket keeps ris­ing

In­surance firm to use chat-bots

The New Zealand Herald - - BUSINESS - Mark Lis­ter is head of pri­vate wealth re­search at Craigs In­vest­ment Part­ners. This col­umn is gen­eral in na­ture and should not be re­garded as spe­cific in­vest­ment ad­vice. The au­thor holds shares in a num­ber of the com­pa­nies men­tioned. Tam­syn Parker

based off­shore, rather than here) tend to be very fickle. They are bet­ter de­scribed as spec­u­la­tors, rather than in­vestors, and their view can be ex­tremely short term.

Com­ments around for­eign own­er­ship re­stric­tions or po­ten­tial fine-tun­ing of the Re­serve Bank Act have seen them lose in­ter­est in us, and move on to the next op­por­tu­nity else­where in the world.

The share­mar­ket, on the other hand, has a much greater pro­por­tion of longer-term in­vestors. That in­cludes Ki­wiSaver funds, pri­vate in­vestors and other groups who still have con­fi­dence in our listed com­pa­nies’ abil­ity to per­form well, re­gard­less of who is in charge of the Bee­hive.

We should also re­mem­ber cur­rency move­ments aren’t all about us. We are only one side of that equa­tion, so of­ten the moves we see have just as much to do with what is hap­pen­ing in the United States, Bri­tain or Europe as in New Zealand.

Eco­nomic data has been stronger than ex­pected in all of those places dur­ing re­cent weeks, and we might see a cou­ple of global cen­tral banks raise in­ter­est rates soon in re­sponse.

These fac­tors have given sup­port to the likes of the Bri­tish pound and the US dollar, which has com­pounded the weak­ness we’ve seen in the local cur­rency.

Many com­pa­nies on our mar­ket have a large in­ter­na­tional as­pect to their busi­nesses these days. Think Fisher & Paykel Health­care,

There is a gen­eral ex­pec­ta­tion that eco­nomic growth might slow a lit­tle amidst pol­icy changes, which means less up­ward pres­sure on local in­ter­est rates.

Main­freight and Xero, where the bulk of rev­enues come from off­shore.

There are plenty more with sig­nif­i­cant ex­port earn­ings. Scales, Tourism Hold­ings, Vista — the list goes on. All these com­pa­nies will be quite happy with what they’ve seen on the cur­rency front lately, be­cause this NZ dollar weak­ness equates to in­creased prof­itabil­ity.

Fi­nally, there is a gen­eral ex­pec­ta­tion that eco­nomic growth might slow a lit­tle amidst pol­icy changes, which means less up­ward pres­sure on local in­ter­est rates. With the av­er­age gross div­i­dend yield for the NZX 50 com­fort­ably above 5 per cent, much of our mar­ket will con­tinue to find sup­port. A Kiwi start-up in­surance com­pany plans to use chat-bot tech­nol­ogy to al­low peo­ple to ap­ply for in­surance and make a claim via their mobile phone.

Chat-bots are com­puter pro­grams that mimic con­ver­sa­tion with peo­ple us­ing ar­ti­fi­cial in­tel­li­gence.

They aim to trans­form the way you in­ter­act with the in­ter­net from a se­ries of self-ini­ti­ated tasks to a quasi-con­ver­sa­tion.

An­drew Coon, chief ex­ec­u­tive and one of three co-founders of Cove In­surance, wants to use the tech­nol­ogy to move in­surance from be­ing a se­ries of form-filling ex­er­cises to a much more user-friendly ex­pe­ri­ence.

Coon, who is the son of Chris Coon who helped found New Zealand life in­sur­ers Sov­er­eign and Part­ners Life and is on the board of the start-up, said and he and his brother Rob, an­other co-founder, grew up around in­surance.

But more re­cently the broth­ers had come back from Europe where they were with in­surance start-up Fi­nance Fox and they were look­ing to use a tech­nol­ogy ap­proach to in­surance.

The pair point to the success of US in­surance start-up Lemon­ade, which has used chat-bot tech­nol­ogy to speed up claims.

Coon said con­sumer re­search pointed to claims be­ing both the best and worst thing about deal­ing with in­sur­ers.

Lemon­ade prom­ises to pay out claims within three sec­onds and Coon be­lieves Cove In­surance will be able to of­fer the same ser­vice here for straight­for­ward claims.

The com­pany plans to launch in the first quar­ter of next year and will fo­cus on car, house and con­tents in­surance, with an ini­tial fo­cus on one of those ar­eas.

Coon said it hoped to use a lot of ar­ti­fi­cial in­tel­li­gence tech­nol­ogy, in­clud­ing im­age recog­ni­tion. Pho­tos of peo­ple would al­low the com­pany to iden­tify cus­tomers, and work out their age and gen­eral health.

Pho­tos of con­tents could help with work­ing out what an item was worth and with stop­ping dis­hon­est claims.

Coon said Cove hoped to tap into the grow­ing num­ber of peo­ple who did not want to speak to a per­son on the phone, al­though clients would be able to speak to some­body if they wanted to.

The fall in the NZ dollar’s value re­flects the fickle ten­den­cies of cur­rency traders.

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