Public confidence in insurance and insurers is at an all-time low and the industry and Government have done little to improve it, says Tower CEO Richard Harding.

Speaking at the Insurance Council of New Zealand (ICNZ) conference in Auckland last week, Mr Harding said insurers have failed to communicate transparently about changes that affect customers.

“Is it any wonder that Kiwis don’t trust their insurers and 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.”

He says insurers have conditioned customers to think that insurance is too hard, bombarding them with confusing information or simply not explaining what is important.

“We expect customers to tell us everything and in return, we tell them the bare minimum.”

For example, the sensitive subject of risk-based pricing saw the industry “shut its doors and duck for cover” instead of having a mature conversation with customers.

He says the lack of confidence in insurance was not helped by the fallout from the Christchurch earthquakes, and the response of the Earthquake Commission (EQC). “This did nothing to improve the perception of insurance in New Zealand.”

Mr Harding urged the Government and EQC to join the industry in an open and honest conversation on the right model for the EQC in the future.

“We need to work together to ensure a sustainable customer-focused solution is in place, so mistakes of the past are not repeated.”

As reported in our Daily bulletin, New Zealand Finance Minister Grant Robertson also warned the conference that public confidence in insurers is under threat.

And Steadfast MD and CEO Robert Kelly said some insurers “have a lot to answer for”. He told the conference the Hayne royal commission showed a number of “absolutely pathetic” products that were pushed onto an unsuspecting public by some insurers.