"We're hoping that this… can start that conversation for [insurance] consumers"

At a time when property insurance policyholders have “genuine concerns” around affordability and suitability of cover, Canstar is looking to help both ends of the scale through its expert-rated home & contents insurer of the year award. Canstar New Zealand general manager Jose George (pictured) sat down with Insurance Business to talk about the timing and importance of the inaugural recognition.

“We’ve had a fair bit of climate-related events in the last six months, and that’s obviously brought home insurance to the forefront in terms of people’s concern,” said George, whose camp introduced the award for car insurance in 2021 before adapting the methodology for home & contents. “Clearly it is now in front of them. What was previously called a one-in-100-year flood or climate event is now becoming more frequent, so consumers are obviously worried.

“Insurers, [given the] reinsurance costs that they’re facing, are also trying to say that premiums are going to have to be relooked at – ‘We need to look at some level of risk-based pricing’ – because some areas, based on whether earthquake or flood or coastal area risks are higher, need to be weighted according to that. So, insurers are getting cleverer or sharper with their ability to assess risk, almost down to a property level.”

Amid these developments, George believes Canstar is well placed to use its ratings to help identify insurance providers that are of outstanding value.

“That’s really what this exercise is about,” the general manager told Insurance Business. “At the end of the day, insurance is not really something that everybody understands closely enough because policies can be complicated. Second, from a cynical point of view, most consumers see insurance as a bit of a grudge purchase… So, they always look to minimise their insurance costs.

“Given the context, given the environment we are in, given the conversations that are happening in the market around pricing and how policies are going to get more expensive – all of that – we think it’s right time to bring ratings-based results to the market to point out where we can find authentic value.”

For 2023, the first time Canstar named a home & contents insurer of the year in New Zealand, the research company rated 15 direct-to-consumer policies from 11 providers. AA Insurance emerged as this year’s award winner.

Growing interest

According to George, the ability to influence consumers in the home & contents space has increased, in that they are now paying more attention than ever.

“We’re really excited,” George told Insurance Business. “We’ve timed this in an environment where the conversation around home insurance is now getting quite clear, and people are interested in ensuring that they’ve got the right level of insurance.

“We’re hoping that this becomes an education – not just for the insurers to know how they performed against their competitors, but for consumers at the other end of the scale to be able to say, ‘How am I getting better value? Is my policy tailored right for my level? Do I need to look at my excess? Do I need to get a better sense for what it could cost to rebuild my property if I had damage?’

“[The hope is for this to become] a start of some level of education from a consumer point of view to be, one, more aware and, two, be able to use it to then talk to their insurers or change insurers if required, to get a policy that fits their requirements. We’re hoping that this kind of expert rating can start that conversation for consumers.”

Meanwhile, “a lot of interest” has also been seen from the insurer side, the benefit of which is improved offerings for policyholders.

George said: “We’re already getting a lot of feedback from insurers wanting to know how they were scored differently from another provider in terms of their features – for example, what the market leader in those features offer compared to them… [They] have been very keen to understand how they stack up against their competitors.

“We can see that consumers have got genuine concerns around affordability and around the specifics of cover for their particular property. So, as insurers get sharper with their tools to be able to identify risk at a property level, we’re hoping that our ability to keep a pulse on the market in terms of making sure that they continue to provide good value… can also help influence insurers as they build new products or as they reprice and as they look at what consumers are looking for.”

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