Consumer NZ says the New Zealand insurance industry should accept that price comparison sites are inevitable in this country and has recommended that insurers work with their organisation - with its impartial status - sooner rather than later.
Consumer NZ CEO Sue Chetwin was speaking to attendees at the 2015 Insurance Council of New Zealand conference, which had the theme ‘Consumer Spotlight’ this year.
Chetwin said comparison sites were ‘not far away’ and were already prolific in other parts of the world.
“Being able to compare things, from an industry perspective, is the way of the world. And from a consumer perspective it is fantastic,” she said. “I would say you probably won’t be able to hold out much longer.
“I would suggest it would be far better for the industry to work with an organisation like ours which is only interested in consumer benefit, than for a profit-driven international aggregator of comparisons to come into the New Zealand market.”
So far, New Zealand’s main insurers have refused to provide pricing data to allow comparison sites
to get underway.
CEO Roger Bell was recruited by search engine optimisation firm Pure SEO to start iCompare last year, only to have been rebuffed.
Chetwin outlined the success the organisation had had with Power Switch, which is the country’s biggest utility comparison site, which had enjoyed great support from the energy industry and she said was now considered to be the most authoritative and informative energy comparison site.
Consumer NZ also has a telco site which is currently offline while the technology is upgraded, she said.
Chetwin said the appeal of her organisation was they were independent, accurate, they didn’t do any deals and there was no advertising on the site which could potentially mislead customers.
“The [insurance} industry does make it difficult here for people to compare on price, and I can sort of understand some of that reticence because you don’t want a drive to the bottom where price is the only thing that consumers look at,” Chetwin said.
“We would have to have cooperation from the industry to develop something like that because we know the complexity of how you write the prices.”
asked ICNZ how it felt about the idea, to which CEO Tim Grafton said it would need more time to discuss the subject with its members.
“ICNZ has concerns with aggregated sites because they don’t give the full picture that is needed when people are choosing insurance. Pitfalls include people typically looking at price rather than the depth of cover," Grafton said.
“Comparison sites such as Power Switch is a commoditised product and quite different than insurance.”