Having become a country that loves a good market study, we've had petrol, banks, supermarkets – so surely insurance, and while you are at it, Air New Zealand, would be a good next stopping point.
Australia isn't overly happy with the way their insurance industry works either, and the regulator last week hinted inspections of some sort were coming.
Like banking, a lot of the insurance game there is run by the same people as it is here. And like the banks, they have the same line up of excuses as to why they are so profitable.
IAG, for example, made a profit in the last year of about $1 billion, and they did it off the back of rising premiums. It was an 8% rise in profit and the dividend was 27 cents.
Premiums are up because of climate change. Payouts, risk, and reinsurance are the usual excuses.
Don't get me wrong, we need profitable and stable companies, but in this cost of living crisis, councils and insurance companies seem to be the last ones standing when it comes to passing costs on at rates a mile higher than inflation.
IAG say we are starting to see inflation easing. Excuse me? It's eased. It's in the band. Central banks all over the world have or are about to cut rates based on the fact inflation is under control.
And not only have premiums gone up, they’ve flagged they will be up another 9 percent next year.
Reinsurance is part of their excuse. Here's a fun fact one of the biggest reinsurers in the world is Swiss Re. Guess how much their profit is up? 17%. To what, I hear you ask, a bit under $4 billion.
So where is the line?
A strong and profitable company versus taking the mick and simply passing on costs because they can and seeing massive profits with big dividends while still milking the old idea that everything is bad, storms rage, and payouts drain resources.
Now if that isn't a market study waiting to happen, I don’t know what is.
Mike Hosking is a New Zealand television and radio broadcaster. He currently hosts The Mike Hosking Breakfast show on NewstalkZB on weekday mornings - where this article was sourced.
IAG, for example, made a profit in the last year of about $1 billion, and they did it off the back of rising premiums. It was an 8% rise in profit and the dividend was 27 cents.
Premiums are up because of climate change. Payouts, risk, and reinsurance are the usual excuses.
Don't get me wrong, we need profitable and stable companies, but in this cost of living crisis, councils and insurance companies seem to be the last ones standing when it comes to passing costs on at rates a mile higher than inflation.
IAG say we are starting to see inflation easing. Excuse me? It's eased. It's in the band. Central banks all over the world have or are about to cut rates based on the fact inflation is under control.
And not only have premiums gone up, they’ve flagged they will be up another 9 percent next year.
Reinsurance is part of their excuse. Here's a fun fact one of the biggest reinsurers in the world is Swiss Re. Guess how much their profit is up? 17%. To what, I hear you ask, a bit under $4 billion.
So where is the line?
A strong and profitable company versus taking the mick and simply passing on costs because they can and seeing massive profits with big dividends while still milking the old idea that everything is bad, storms rage, and payouts drain resources.
Now if that isn't a market study waiting to happen, I don’t know what is.
Mike Hosking is a New Zealand television and radio broadcaster. He currently hosts The Mike Hosking Breakfast show on NewstalkZB on weekday mornings - where this article was sourced.
4 comments:
And I'll wager your house insurance hasn't gone up as much as most of ours in the greater Wellington region? I live in the Hutt, my house & contents went up over 38% with no increase in the sums insured. That's a rort - and don't bother with the climate change nonsense.
The Commerce Commission is to blame with all this, Competition has all but gone by allowing mergers and acquisitions. Where we once had dozens of competing insurers we now have 2 and I have no doubt there is collusion. Add to that the never ending gloom and doom promoted by government both local and central about flood, earthquake etc and of course the "need to raise premiums" is a gift on a plate because the public is already brainwashed
And they are so quick to help.
One of my flooded friends has had 13 assessors. Another is still fighting to get a settlement following Gabrielle.
I had no insurance by timing. Maybe I am better off?
An excellent choice of topic Mr Hoskings! I thought the NZ insurance industry would get a thorough going over after the Chch earthquakes where it seemed so many home owners were let down. But oh no, Gerry Brownlee and the then National govt seemed to give them a free pass. Ardern’s Labour govt, of course, didn’t do anything useful and here we are today with ever-increasing premiums and an extremely arrogant and customer-unfriendly industry. I’ve just been dealing with one of the supposedly better companies to do with cover for a building project I was surprised to find was excluded from my home cover policy. Had to communicate with at least 5 different people mostly by email as you can’t just talk to someone knowledgeable. It was tedious and inconvenient. Outcome was a quote for cover that I refused due to the poor value it represented. Complete waste of time. We’re overdue for a major “deep dive” investigation and some meaningful outcomes.
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