A healthy balance

Many KiwiSaver members now expect their money to be invested responsibly. MAS has the credentials to ensure that’s the case, and its unique model means it can take responsibility a step further through the efforts of its charitable foundation.

Mike Davy, the chief member advocacy officer of MAS, sees money as a force for good.

“What we try to do is provide the best insurance cover and the best KiwiSaver scheme and we use that as a vehicle to inspire a healthier Aotearoa,” he says. “That’s our purpose. And the more customers that join, the more impact we can have.”

A long history

When the Medical Assurance Society began just over 100 years ago, membership was restricted to doctors. It eventually expanded to serve other professions such as dentists, vets, architects, accountants, lawyers and engineers. Now any New Zealander can become a member.

MAS, as it is known today, is set up as a mutual, which means that customers are like owners of the business. Any profit it makes stays in New Zealand and those profits are either reinvested back into the business so it can improve, compete and grow, or redirected to its foundation.

Davy says this model is common in other countries, and some mutuals dominate their markets overseas, but it’s not that well understood in New Zealand. MAS’ status as a charitable group makes it even more unique in New Zealand.

“The thing we want to be known for is our social impact in New Zealand communities, and we think standing for health equity and doing our bit for a healthier planet are two very important parts of that.”

Double whammy

In total, MAS has around $2.5 billion invested across its insurance and KiwiSaver products, so it’s not a huge player in comparison to some other providers. But Davy says it has a different business model when compared to the bigger commercial players and it sees itself as challenging the status quo.

The MAS Foundation was established in December 2019 and has distributed grants of $3.5 million to over 42 community initiatives since then. The Foundation’s strategy has evolved to funding broader health and wellbeing projects, with an aim to continue making grants of just under $2 million each year, although this should grow as MAS grows.

“Our research shows that our target customers are time-poor, career-minded, highly educated people who are very active in their communities. They like the thought that something they’re going to be paying for anyway, like insurance or KiwiSaver, can have an impact on their behalf. That’s the key point of difference with us.”

In principle

MAS has been a KiwiSaver provider since 2007, offering that option to its professional members, but it received an unrestricted licence last year, meaning it could offer the MAS KiwiSaver Scheme more broadly. From the start, Davy says it has taken a leadership position around responsible investing in an effort to stand out in what is an increasingly crowded space.

“If you go to any number of KiwiSaver providers, they’re all claiming very similar things, like supporting climate action or not investing in certain industries like fossil fuels or weapons. That’s not to belittle that, because it’s very important to MAS and to many New Zealanders, but it is almost commoditised now.”

All funds in the MAS KiwiSaver Scheme are certified by the Responsible Investment Association of Australasia. MAS adheres to the UN’s Principles of Responsible Investment, and it was a finalist in the most recent Mindful Money awards. It also relies on MSCI—one of the world’s leading ESG market index and ESG analysis firms—to guide its investments.

“They update their assessments on a regular basis, which means that individual companies may move in or out of the MAS portfolio… It’s a never-ending game, but we’re committed to being leaders in this space.”

Taking their own medicine

Davy says MAS invests its own money in the same way it invests its customers’ money.

“We’re not just green and ethical as a KiwiSaver provider because we have to be, but then go and put our own money [from the insurance business] into ‘sin stocks’. We put our money where our mouth is.”

Its own research suggests that investing responsibly is not just about the feelgood factor, either. It’s also about getting good financial returns.

“When you compare responsible investments to a market index, the returns are similar, and in some sectors you can see out-performance. Our belief is that the companies thinking about their impact the same way as us, and the same way as our customers, will be able to offer a strong return over the long term.”

As MAS grows, Davy hopes it can eventually put more money directly into promising New Zealand companies that combine purpose and profit, something known as ‘impact investing’.

Peace of mind

When it comes to KiwiSaver and other investments, many New Zealanders are increasingly demanding their money is invested responsibly. But Davy says they don’t tend to think about the impact their money can have when it comes to choosing an insurer. That’s changing, however.

“Seven years ago we had 25,000 members, and today we have close to 45,000… We think there are lots more New Zealanders who want quality service and quality products, but they also want to know that their dollars will be working hard for New Zealand. We want to grow our impact in New Zealand society. And we’re only just getting started.”

  • Medical Funds Management Limited is the manager and issuer of the MAS KiwiSaver Scheme. The PDS for the Scheme is available at mas.co.nz/kiwisaver.

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