The creation of another state-owned insurance company would be unnecessary and ill-conceived, the Insurance Council of New Zealand (ICNZ) says.

The Labour Party has announced that, if elected, it will set up KiwiAssure, offering home, contents and vehicle cover and some small business services.

It is a response to perceived delays in payouts following the Canterbury earthquakes.

But ICNZ CEO Tim Grafton says it is a bid to grab “low-hanging political fruit” and the Christchurch recovery is progressing well “given the enormity of the task”.

“New Zealand already has a responsive, innovative and responsible private insurance industry and to suggest further state ownership is the answer begs me to ask, what on earth is the question?

“Establishing a state-owned insurer and slamming foreign-owned insurers sends a very negative signal to those that provide the investment capital to support insurance activities in this country that there will be no level playing field.

“Following the Canterbury earthquakes, the last thing anyone should be doing is trying to drive away insurance capital.”