NZ insurers wrong to deny comparison sites says the former boss of one

NZ insurers wrong to deny comparison sites says the former boss of one | Insurance Business

NZ insurers wrong to deny comparison sites says the former boss of one
Ex-Vero CEO Roger Bell says the New Zealand insurers who have all refused to provide pricing data for the comparison website he is helping to set up are effectively opposing consumer choice and putting their brands at risk.

Bell told Insurance Business he was surprised that no local insurers had come on board but it was only a matter of time before customer demand would pressure them into it.

He said: “I had expected a different response, yes. I think it’s a remarkable coincidence that in a very, very competitive industry not one of them is prepared to say ‘we’ll do that’. Because for them it will be another distribution channel that would be cheaper than they’re currently paying for advertising costs or broker costs of acquisition.

“They appear to be saying you can’t trust Kiwis to choose a good insurer for general insurance,” he said.

After 40 years of working in the insurance industry, Bell was called out of retirement to help British expat Richard Conway of Pure SEO, a search engine optimisation firm, in his attempt to persuade the Kiwi insurers that signing up to their comparison site iCompare was the way of the future.

So far only overseas insurers had agreed to provide information although this week one NZ insurer had agreed to meet with Bell - in a month’s time.

Conway had been in touch with the IT departments with most of the insurers and none had seen any difficulty with linking to iCompare electronically.

While Bell admits it’s been a bit strange being on the ‘other side’, he says these sites are well entrenched in Australia and Britain and are already well accepted in New Zealand for finding life insurance or mortgages.

Indeed, Russell Hutchinson, who co-owns Quotemonster, the NZ life insurance comparison site for financial advisers, said after initial worries from insurers on the effect on existing channels, every channel had grown in the last 10 years.

He said: “While initially reluctant, life insurance is a competitive area and while some companies were looking for a way to grow that enabled online comparison sites to get going, and that quickly pulled in the other insurers.”

Concerns that people would focus solely on price had been cited by the Insurance Council of New Zealand as well as AA Insurance, IAG, and Bell’s old firm Vero.
But Bell said: “We strongly oppose that line from insurers that customers would just go for the cheaper option.

“Ironically I believe that’s what they do at the moment. We know from insurers’ records that most Kiwis just renew their policy, they don’t shop around. But those that do would shop around on price because that’s about all they can compare.

“Our facility will offer them the opportunity to do a more technical comparison – it will list all the major exclusions and all the major conditions and the premiums.

“I think the New Zealand insurers are simply scared that if the customer has more knowledge of the product they might not stay with them. Most of them [insurers] deal with brokers and they’re used to that mechanism and happily go along with it. But when it’s their own direct insurance companies they’re not prepared to assist their customers in finding out how good their policies are.”

Bell said brokers shouldn’t feel threatened by comparison sites which would probably only work best for personal, motor and domestic insurance, 85% of which is purchased direct.

“I think commercial products are too complex. I worked for 40 years dealing with brokers and I think by and large they do a very good job in understanding the complexities.

“Ironically they do for commercial clients what we’re proposing to do for direct clients so I don’t think they’ve got anything to worry about.”

With the iCompare publicity campaign about a month away from being launched, he said the NZ insurers would do better to join up now rather than be seen having to succumb to public demand.

“I’m surprised they would put their brands at risk because as our publicity gets underway they’ll be under a lot of pressure from their own customers saying ‘I’ve been loyal to you all this time but you won’t allow me to compare your terms and conditions.’

“I think NZ insurers are wrong because I think our website will prove to have better outcomes for them and their customers. These insurers have big brands, I consider them to be good brands, proud brands, and I believe it’s very disappointing that they’re behaving like a sort of cosy club instead of responding to the way customers like to deal nowadays which is digitally online and to have well-informed consumer choice.”