Resetting the insurance scene
The insurance industry landscape is set to look markedly different from today as it emerges from the grips of the global financial crisis, a new report from PricewaterhouseCoopers (PwC) predicts.
Tuesday, October 6th 2009, 4:39PM
by Sonia Speedy
Entitled Emerging from the Storm: The day after tomorrow for insurance, the report focuses on the global insurance industry, looking ahead to examine how the financial crisis is likely to reshape it in the years to come.
However, Auckland-based PwC financial services tax partner David Lamb says many of the report's global themes are applicable to New Zealand, particularly around regulation, taxation and changing consumer preferences.
The report describes the financial crisis as a "watershed" for the insurance industry in many parts of the world, with expectations from customers, investors, governments and regulators all changing rapidly.
It also speaks of a "reawakening" of merger and acquisition activity, which Lamb says is a "definite possibility" in New Zealand, as evidenced by the recent acquisition of ING by ANZ.
"I think in New Zealand because (the industry) is predominantly foreign owned, there may be things that happen outside of New Zealand - in particular Australia - that will impact New Zealand," he says.
"There are constantly rumours in the marketplace in Australia around some of the big players and what may or may not be happening there. Again largely driven by what is happening offshore, but it could definitely have an influence in the New Zealand marketplace."
Lamb highlights the huge amount of regulation currently taking place - and the cost that brings with it for the New Zealand industry - along with the reforms around life insurance taxation and New Zealand's comparatively high level of underinsurance, as significant themes in the industry's evolution.
Lamb adds that insurers are currently very focused on the issues immediately in front of them.
"The risk with that is that with the huge amount of changes going on it is important they don't take their eye off the strategic ball, which is going to be one looking out two, three, four or five years," he says.
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