New Zealand was ranked as the second riskiest country in the world in a 2018 Lloyd’s of London study, and ICNZ chief executive Tim Grafton said it was encouraging to see a high level insurance penetration across the country, but that people still underestimated the cost of replacing their assets and sustaining their income in the event of death or disaster, which could make them very vulnerable.
Meanwhile, a Massey University study showed that about 54% of Kiwis have insufficient levels of life insurance, and at least half would experience a 40% drop in income due to a underinsurance if the main economic support were to die.
Read more: New Zealand’s death protection gap set to widen
Swiss Re New Zealand Life and Health Manager Kresh Wright said when it comes to perceptions of insurance, many Kiwis don’t think about coverage at all, or feel like they would be helped by their friends and family – something that has given New Zealand one of the highest death protection gaps in the Asia-Pacific region.
“There are a lot of households in New Zealand that are racking up a lot of debt, but have not yet reached the stage where they think about insurance and building wealth,” Wright said.
“On the perceptual side of things, New Zealanders also seem to be very similar to Australians in that they think they can rely on government, other public funds, and family and friends for come to the rescue if they experience a mortality shock or loss event. These kinds of perceptions are less strong in some of the other Asian markets like Japan, Singapore, and Hong Kong, so they tend to have more coverage. “
“I think this is a really huge opportunity for New Zealand insurers to get involved, and I know a lot of our clients have this high on their list,” she explained.
“They really want to think about how they can reach more New Zealanders, and education is key here. I think insurers, along with government and other industry bodies, can help increase that level of education and awareness. “
Wright said the “good news” on insurance is also important. She noted that the majority of the public only sees insurance in the news when a claim has been denied, or if an insurer runs into legal or financial problems – which has long contributed to a poor and unreliable image of the industry. .
Read more: The level of underinsurance for D&O liability is “worrying” – ICNZ
For Swiss Re, Wright said the focus is going to be on education through advisors and digital channels – two channels that clients have increasingly embraced in recent years.
“I think it’s really important that we start releasing some of the ‘good’ insurance news,” Wright said.
“We hear a lot about bad news, but there are thousands of stories from the opposite side, and if more Kiwis could hear them, I think they could better understand the benefits of insurance and increase their confidence in We need to make it clear that insurance is a smart way to protect you and your family from some of these shock events. “
“Something that we ourselves are looking at very closely are the different channels for contacting and communicating with consumers,” she said.
“New Zealand has always been an advisor-centric, but we’re definitely looking at more digital channels and ‘omnichannels’, which are a combination of online and human interactions. “
“We want Kiwis to have the information they need to make good decisions about their insurance, and our previous studies have shown that they are actually very open to receiving them and going through the online application processes,” Wright concluded.
“So we really want to take this path, in addition to having simpler products. We think these two things could really make a big difference.