COVID-19 pandemic knocks Kiwis' financial confidence

COVID-19 pandemic knocks Kiwis' financial confidence | Insurance Business New Zealand

COVID-19 pandemic knocks Kiwis' financial confidence

The COVID-19 pandemic has knocked the financial confidence of New Zealanders, who are growing “increasingly pessimistic” about their ability to cover expenses such as insurance, mortgage payments, education and holidays.

The new findings are part of health insurer Cigna’s COVID-19 Global Impact Study: Resilience and Wellbeing through the Pandemic, which looked at the effect of COVID-19 on financial and personal wellbeing across the globe, including New Zealand.

The findings showed that almost half of New Zealanders think their ability to cope financially in an emergency would be fair or poor, and 41% feel they are in a fair or poor financial situation, compared to 34% in January.

Read more: AIA pledges support for financial advisers amid COVID-19 recovery

A high number of respondents were also concerned about job stability, with just 64% agreeing that they have a stable job compared to 73% in January.

Cigna New Zealand CEO Gail Costa said New Zealand’s findings are broadly in line with the mood across the rest of the world, and that it’s no surprise that the pandemic has had a significant impact on confidence. She said that trust and confidence in financial services will be key to recovery, along with strong support from independent advisers.

“I think we’ve seen that advice builds trust and confidence, so that’s very important,” Costa commented.

“We’ll be using this research to support our customers and the adviser community as we work together to navigate this challenging environment, and support New Zealanders with quality financial advice.”

Costa said that maintaining a ‘high-trust’ insurance market is also important, and that customers are looking for simple and affordable products which will protect them now and into the future.

Read more: “Alarmingly excellent” results for Kiwis who seek financial advice

“I’d like to reflect on my experience in Turkey, which is a very low-trust market where the regulators regulated everything, because they couldn’t trust the insurers and they needed to protect the consumers,” Costa noted.

“They went to great lengths to do that, and that did not build any trust in the market. Insurers tended to look for loopholes, so the opposite of what they should be doing.”

“In New Zealand, it’s so different culturally,” she explained.

“We’re trying to protect the customer by building trust and confidence in the industry, and the industry wants that. All over the world, customers want affordability, simplicity and predictability - especially in our industry.

“Insurance is often a long commitment of money, and they want to know that we will deliver on our promise.”