Insurers need to work together to build the pie: Carroll
The insurance industry needs to band together and grow the market rather than continue the in-fighting and tussling for a bigger share, according to the head of Asteron.
Wednesday, November 11th 2009, 8:14PM
by Paul McBeth
Asteron managing director Sean Carroll told advisers at a Grosvenor Financial Services conference that insurers are wasting too much time and energy fighting amongst themselves for a larger share of an overall market which has been relatively static for several years.
New Zealanders have less coverage than their Australian counterparts, who are considered under-insured, so there is plenty of opportunity for the whole sector to grow, it just requires the companies to put aside their differences and work towards a bigger goal, he said.
"This is about growing the whole pie," Carroll said. "Then we can think about market share and position."
This will involved insurers taking the lead in how the industry is perceived by the public as well, and Carroll said they have to promote "good news stories" about the insurance business, rather than let the media focus on the when they do not pay out claims. The Insurance Savings and Insurance Association, which Carroll also chairs, is looking at ways to help improve the industry's reputation, he said.
Carroll said the commission war over the past few months had done nothing for the industry, and as an actuary, he said he knew "exactly" how it is costing his competitors. Change needs to be customer-driven, and Carroll said he does not think the commission rates being offered are sustainable.
When questioned by an adviser in the audience, Carroll agreed it was likely there would be some mergers in the industry as some of the smaller insurers were squeezed out.
Paul is a staff writer for Good Returns based in Wellington.
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