Tower’s CEO says New Zealanders’ don’t trust carriersNovember 12 2019 by InsuranceAsia News Staff
New Zealanders’ trust in insurers has fallen to an all-time low, remarked Richard Harding, chief executive of Auckland-headquartered Tower Insurance. His remarks came at the Insurance Council of New Zealand’s (ICNZ) conference last week.
Harding (pictured) noted that insurers have fostered a lack of transparency towards consumers, allowing them to be confused by either telling them the bare minimum or showering them with confusing information.
“Is it any wonder that Kiwis don’t trust their insurers and [that] we’ve all been asked to look at the culture and conduct of our businesses? There is a need for a mature and open conversation,” Harding argued. In terms of risk-based pricing, Harding noted that insurers closed their doors for an open conversation with customers.
New Zealand’s finance minister Grant Robertson, agreed, saying that public trust in insurance is under threat, with consumers having little confidence in insurers to provide appropriate advice and products. According to Robertson, areas for improvement include affordable property coverage, helpful information for consumers and ensuring insurers channel transparent and appropriate messages to consumers.
“Some insurers have a lot to answer for,” commented Robert Kelly, managing director and chief executive of broking network Steadfast. Kelly highlighted evidence of insurers pushing “absolutely pathetic” products onto unsuspecting consumers.
He added that good legislation has meant good broker conduct; however, intermediaries could be negatively affected by the insurers’ fallout.
A September conduct and culture review of insurers by the Reserve Bank of New Zealand (RBNZ) and the Financial Markets Authority (FMA) showed slow progress in implementing measures to improve insurer conduct. Only some insurers agreed to removing or refining sales incentives.
RBNZ will conduct a review of the Insurance Act in 2020, which focuses on insurer solvency. Post-review, the Reserve Bank may stipulate more stringent measures for the market.
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