New Zealand’s finance and insurance sector is a “top productivity performer” and highly innovative, according to a report by the country’s Productivity Commission.

This is partly due to the sector’s investment in and use of information and communications technologies, it says.

The Government told the commission to investigate the services sector because New Zealand’s productivity is below peers in the Organisation for Economic Co-operation and Development.

The Insurance Council of New Zealand (ICNZ) told the inquiry there could be significant benefits to aligning regulatory developments in Australia and New Zealand, to drive cross-border investment.

It says the industry has no clear, single piece of regulation for market conduct and there are several regulators.

“This fragmentation leads to inconsistent and sometimes inappropriate introduction of regulation,” it says. “We also end up with confusion for consumers.”

The commission’s report recommends the Government review the Commerce Act, taking account of Australia’s review of competition policy.

It advises a consistent approach to establishing a trans-Tasman economic market, while taking into account New Zealand’s own characteristics.

The report considers comparison websites, but finds it unlikely they will attract enough traffic to be commercially successful in the small New Zealand market.

ICNZ argues such websites encourage consumers to focus on price instead of cover and risk, and are unsuitable for the diversity of insurance products.

But the commission says comparison websites “are likely to be particularly valuable to consumers of more complex services, where customers know less about the service they are purchasing than the seller”.