Suncorp's CEO only did one interview while he was in NZ - this is it. Appreciated his honesty on all of these topics. Hope it gives you some insight into how insurers are thinking about these issues.
Madison is top notch! I bet everyone she interviews are surprised by her hard questions based on her high level of understanding. A breath of fresh air, exactly what people need. 👏
That's not the insurance companies fault. Blame the bureaucracy that stops builders having a choice of building products to chose from. The NZstandard stops NZ using Australian , Canadian and others products, which could be cheaper and more importantly, available. And the 'insulation of homes' standards, push's the price even higher. Supposed to improve the average NZ health and reduce hospital admissions. And ask any builder what hoops you have to jump through to use second-hand housing products. Essentially, it's not worth it. And the leap-frog of wages go up, so product prices go up, costs go up higher, is just a part of life. I can assure you the cost of fish in the sea has not gone up in the last 100,00 years, but what it costs to land the fish and meet all the MPI requirements and pay the higher fuel costs and ship survey costs, just makes that little fish a more expensive part of your diet. We may moan and groan, but the standard of living we have today, is probably better than at any other time in history. Enjoy it while it lasts! (As John Clarke aka Fred Dagg sang "We don't know how lucky we are mate...." )
So if New Zealand has a major incident, the insurance will not pay out! and the tax payer will have to! So why don't the Government just be the insurer and get rid of these BS artists!
Of course your return on shareholder equity is 5% when your share price goes up 30% in a year. Thirty percent increase in share price when the world is now more risky proves that profitability and pricing power has massively grown. We can all feel it.
One thing they don't trust is emissions reduction and tax to stop it otherwise they would not be putting premiums up. They perhaps believe emissions reduction and tax is nothing but a con.
Why? Because they can. Ownership of insurance companies is incredibly concentrated. IAG and Suncorp own the market in both Australia and New Zealand. Quick reminder: many of these businesses used to either be publicly owned or owned by policy holders (mutual model). Consumers were told that amalgamation would lead to efficiencies and cheaper prices for consumers. And here we are.
These are only the Front-line companies, are they not? The real 'suppliers' of the Insurance Fund (namely the underwriters) are Lloyds Banking Group (That almost went broke in 2008) that is based in London and currently has an equity listing on the Britannica web site of $48.95 Billion. An annual revenue of $18.55 billion. IAG and Suncorp are the sort of 'go-between man' that works out the risk and offers the 'plan' to the insurance subsidiaries for Australia and New Zealand. If Lloyds' 'rates' goes up, I imagine the flow on affect hits the average insurer, who also is hit by the local factors as well, in the form of levies.
"Significant Weather Events" have been happening forever ... just do a search on (say) history of floods in Queensland. The real problem is artificially driven high global inflation and corporate greed.
I self insure have done for several years now. I invest the money rolling the capital over each year. Insurer talking about climate change is a laugh. If they believed it you wouldn’t be able to get insurance on a beach house. “It’s very complex” that old chestnut 😂
People are paying sky high insurance premiums because the NZ insurance market is dominated by two insurance groups, IAG and Suncorp. Just like the dominance by the local supermarket duopoly.
I heard of a small company that was selling British Insurance for earthquake cover. Don't know if it's still in existence. The idea being, that in the case of a major, local event, the British company would not be affected (being in another country), so they would pay out straight away and not be 'hog-tied' because they had to sell off investments at a lower price, which would delay when they could pay out the claims. But since the pound to $NZ is so high, I don't think it would be viable today?
I would love risk based insurance on my house. I have no danger of being flooded and having a modern timber framed house with lightweight cladding and roofing built on clay soil, it would come through an earthquake just fine (contents may not), my biggest risks are fire and wind storm. However, I would feel sorry for those who bought a house in a flood zone, as insurance would rapidly become unaffordable and they wouldn't be able to sell as no-one would want an uninsurable house in a flood zone.
You have that option with motor vehicles to just get a 3rd party fire and theft policy. By preventing customers self tailoring their risks they make more money I guess but customers are able to tailor their $ amount of cover though.
@@petercreagh8797 It's a bit like those ads I've seen for car insurance where they say they don't look at your past record...that's good for people who have had many claims before. But as someone who's only has made claims due to other people's bad driving (always in parking lots), I don't want to be subsidizing reckless drivers. I feel like house insurance is like that, I'm subsidizing those who are much higher risk than myself, and there is nothing I can do about it if I want to be covered.
@@Pete856 Oh yeah, those ads! And I cringe at the one's that 'suggest' that because you have insurance, you can take more risks! Just back into that carpark or garage without a care in the world. Well, the reality of paying the excess and the inconvenience of going through the 'paperwork'/online claims and finding a new car, is not the reality at all. Who comes up with these ad's?? Teenagers? Oh, plus let's not mention about when the ad's come on........................... BOOM! 🔊Blown to the other side of the lounge. I hit the MUTE button, faster than you can say "What is wrong with the technology today!" (Glad to get that one off my chest 😂)
An annual insurance model, where profits are distributed every year doesn’t put money aside for a rainy day. And, more importantly doesn’t flow into risk mitigation and decision making. Another example of markets with a short term focus not giving the best outcome.
Lots of people are not wanting insurance with the cost of living increasing. Forcing prices higher, forces people away. Insure yourself with investments, instead of insurance.
The Great Fire of London is my first thought. All first home buyers that have to take out a mortgage with the bank, know full well, that the bank will not let them have the loan, if they do not have house cover insurance. And I am pretty sure that the Banks want a fire brigade, to reduce their losses in the event of a house fire, to partially protect their investment.
the climate change grift is slowly distorting our economies and eating away at every single facet of our lives. From land use 'changes', insurance, through to food prices and energy supply. Energy is life and fossil fuels provide our modern lifestyles we all enjoy and take for granted.When we allow climate policy to create artificial scarctriy of our most precious life resource, every single aspect of our lives becomes more expensive. Where climate change policy goes, economic devolution flows. No one will be able to afford anything and we will simply be renting our lives from our new techno-feudal corporate landlords. I for one welcome our new overlords, I'm sick of working away to be able to afford less and less as time goes on. I’m ready-take me in your big strong arms oh wise stewards of progress, free me from this debt prison, and deliver me into the safety of your technocratic control. Why struggle for ownership when I can rent my life in your sustainable utopia?
That would be a very interesting proposition, going from Lloyds Banking Group to a Chinese equivalent. However, no matter who the underwriters are, the risks are still the same and I would think the 'calculations for underwriting the risk' would give the same outcome at the end of the day and it would not change the premium. But I know absolutely nothing about money and investments. All I know, is that my XL Spreadsheet keeps showing me my expenses grow year after year. And when you get near retirement, all your money is spent on your teeth, spectacles and whatever comes flying out of the blue, that requires prescriptions. Old age costs, run almost equal to Insurance and Rates. Thank goodness we can't take any of it with us when we take our last breath 😁
Suncorp's CEO only did one interview while he was in NZ - this is it. Appreciated his honesty on all of these topics. Hope it gives you some insight into how insurers are thinking about these issues.
Why would they talk to anyone else. The main-stream media in NZ is biased and stupid.
Madison is top notch! I bet everyone she interviews are surprised by her hard questions based on her high level of understanding. A breath of fresh air, exactly what people need. 👏
How do you know when an insurance company CEO is lying? Their lips are moving! 🤣
Funny joke but interviews are about understanding others' perspectives, which is essential for business people like me watching.
Thanks Madison another great interview youre on fire
Two words: "Price gouging"
30 years and never made a claim, they still put up my Insurance, nearly twice has much as 10 years ago!
That's not the insurance companies fault. Blame the bureaucracy that stops builders having a choice of building products to chose from. The NZstandard stops NZ using Australian , Canadian and others products, which could be cheaper and more importantly, available. And the 'insulation of homes' standards, push's the price even higher. Supposed to improve the average NZ health and reduce hospital admissions. And ask any builder what hoops you have to jump through to use second-hand housing products. Essentially, it's not worth it.
And the leap-frog of wages go up, so product prices go up, costs go up higher, is just a part of life.
I can assure you the cost of fish in the sea has not gone up in the last 100,00 years, but what it costs to land the fish and meet all the MPI requirements and pay the higher fuel costs and ship survey costs, just makes that little fish a more expensive part of your diet. We may moan and groan, but the standard of living we have today, is probably better than at any other time in history. Enjoy it while it lasts! (As John Clarke aka Fred Dagg sang "We don't know how lucky we are mate...." )
So if New Zealand has a major incident, the insurance will not pay out! and the tax payer will have to! So why don't the Government just be the insurer and get rid of these BS artists!
That’s a great question
New Zealand might be remote but, as the reinsurance companies are learning, the climate is everywhere.
Great interview and very informative.
Thanks for asking the hard questions Madison.
Any time
Of course your return on shareholder equity is 5% when your share price goes up 30% in a year. Thirty percent increase in share price when the world is now more risky proves that profitability and pricing power has massively grown. We can all feel it.
It is all about high profits, enhanced bottom lines.
Unlike some politicians, you'll never find an insurer saying "I don't believe in climate change". Great Interview.
One thing they don't trust is emissions reduction and tax to stop it otherwise they would not be putting premiums up. They perhaps believe emissions reduction and tax is nothing but a con.
Numbers are up, We'll done on the channel
Another great interview Madison. 👍
Great interview
Why? Because they can. Ownership of insurance companies is incredibly concentrated. IAG and Suncorp own the market in both Australia and New Zealand. Quick reminder: many of these businesses used to either be publicly owned or owned by policy holders (mutual model). Consumers were told that amalgamation would lead to efficiencies and cheaper prices for consumers. And here we are.
These are only the Front-line companies, are they not? The real 'suppliers' of the Insurance Fund (namely the underwriters) are Lloyds Banking Group (That almost went broke in 2008) that is based in London and currently has an equity listing on the Britannica web site of $48.95 Billion. An annual revenue of $18.55 billion.
IAG and Suncorp are the sort of 'go-between man' that works out the risk and offers the 'plan' to the insurance subsidiaries for Australia and New Zealand. If Lloyds' 'rates' goes up, I imagine the flow on affect hits the average insurer, who also is hit by the local factors as well, in the form of levies.
"Significant Weather Events" have been happening forever ... just do a search on (say) history of floods in Queensland.
The real problem is artificially driven high global inflation and corporate greed.
strap in its about to get worse with the cyclone in the USA
Very interesting and informative. I have a better understanding of why my premium have become premium..Hmmm!!!
I self insure have done for several years now. I invest the money rolling the capital over each year. Insurer talking about climate change is a laugh. If they believed it you wouldn’t be able to get insurance on a beach house. “It’s very complex” that old chestnut 😂
People are paying sky high insurance premiums because the NZ insurance market is dominated by two insurance groups, IAG and Suncorp. Just like the dominance by the local supermarket duopoly.
I heard of a small company that was selling British Insurance for earthquake cover. Don't know if it's still in existence.
The idea being, that in the case of a major, local event, the British company would not be affected (being in another country), so they would pay out straight away and not be 'hog-tied' because they had to sell off investments at a lower price, which would delay when they could pay out the claims. But since the pound to $NZ is so high, I don't think it would be viable today?
I would love risk based insurance on my house. I have no danger of being flooded and having a modern timber framed house with lightweight cladding and roofing built on clay soil, it would come through an earthquake just fine (contents may not), my biggest risks are fire and wind storm. However, I would feel sorry for those who bought a house in a flood zone, as insurance would rapidly become unaffordable and they wouldn't be able to sell as no-one would want an uninsurable house in a flood zone.
You have that option with motor vehicles to just get a 3rd party fire and theft policy. By preventing customers self tailoring their risks they make more money I guess but customers are able to tailor their $ amount of cover though.
@@petercreagh8797 It's a bit like those ads I've seen for car insurance where they say they don't look at your past record...that's good for people who have had many claims before. But as someone who's only has made claims due to other people's bad driving (always in parking lots), I don't want to be subsidizing reckless drivers. I feel like house insurance is like that, I'm subsidizing those who are much higher risk than myself, and there is nothing I can do about it if I want to be covered.
@@Pete856 Oh yeah, those ads! And I cringe at the one's that 'suggest' that because you have insurance, you can take more risks! Just back into that carpark or garage without a care in the world. Well, the reality of paying the excess and the inconvenience of going through the 'paperwork'/online claims and finding a new car, is not the reality at all.
Who comes up with these ad's?? Teenagers? Oh, plus let's not mention about when the ad's come on........................... BOOM! 🔊Blown to the other side of the lounge. I hit the MUTE button, faster than you can say "What is wrong with the technology today!" (Glad to get that one off my chest 😂)
An annual insurance model, where profits are distributed every year doesn’t put money aside for a rainy day. And, more importantly doesn’t flow into risk mitigation and decision making. Another example of markets with a short term focus not giving the best outcome.
Lots of people are not wanting insurance with the cost of living increasing. Forcing prices higher, forces people away.
Insure yourself with investments, instead of insurance.
He's not wrong about the levies contributing to unaffordability. Why should insured people have to pay for the fire service in NZ?
The Great Fire of London is my first thought.
All first home buyers that have to take out a mortgage with the bank, know full well, that the bank will not let them have the loan, if they do not have house cover insurance. And I am pretty sure that the Banks want a fire brigade, to reduce their losses in the event of a house fire, to partially protect their investment.
the climate change grift is slowly distorting our economies and eating away at every single facet of our lives. From land use 'changes', insurance, through to food prices and energy supply. Energy is life and fossil fuels provide our modern lifestyles we all enjoy and take for granted.When we allow climate policy to create artificial scarctriy of our most precious life resource, every single aspect of our lives becomes more expensive. Where climate change policy goes, economic devolution flows. No one will be able to afford anything and we will simply be renting our lives from our new techno-feudal corporate landlords. I for one welcome our new overlords, I'm sick of working away to be able to afford less and less as time goes on. I’m ready-take me in your big strong arms oh wise stewards of progress, free me from this debt prison, and deliver me into the safety of your technocratic control. Why struggle for ownership when I can rent my life in your sustainable utopia?
I too welcome the overlords. I look forward to the day when I can get to rent a robot. House minder, friend and someone to help paint the house!
Insurance companies should have worked with China to get cheaper products to lower the premiums.
That would be a very interesting proposition, going from Lloyds Banking Group to a Chinese equivalent. However, no matter who the underwriters are, the risks are still the same and I would think the 'calculations for underwriting the risk' would give the same outcome at the end of the day and it would not change the premium. But I know absolutely nothing about money and investments. All I know, is that my XL Spreadsheet keeps showing me my expenses grow year after year. And when you get near retirement, all your money is spent on your teeth, spectacles and whatever comes flying out of the blue, that requires prescriptions. Old age costs, run almost equal to Insurance and Rates. Thank goodness we can't take any of it with us when we take our last breath 😁
Must be Albos fault because everyone is blaming him for the cost of living crisis.