How are car insurance customers behaving in NZ's non-intermediated market?

How are car insurance customers behaving in NZ’s non-intermediated market? | Insurance Business New Zealand

Motor & Fleet

How are car insurance customers behaving in NZ’s non-intermediated market?

Insurance Business sat down with Canstar New Zealand’s GM to find out

Motor & Fleet

By
Terry Gangcuangco

In a market where there are no financial advisers to guide insurance buyers, aka the direct-to-consumer channel, the emphasis is very much on price. Here Canstar New Zealand general manager Jose George (pictured) talks about what’s happening in the non-intermediated car insurance space in terms of consumer behaviour amid rising expenses.

“What we’re seeing is, Kiwis are really looking for value now,” George told Insurance Business. “It’s not something new, but Kiwis are increasingly looking for value… People are looking out for ‘what is best for me’, so we’re seeing a sizable number of people who are now actively looking for better-value car insurance, particularly in the younger age bracket.

“A couple of things that we’ve picked up from our consumer insights is that a lot of people are trying to get their home & contents and their car insurance together with the same provider as a way of managing costs better, because they usually tend to get multiple-policy discounts, and they’re also starting to pay insurance in instalments to manage their costs.”

According to a 2023 study by Canstar NZ, 45% of consumers are bundling home and car insurance for a discount, while the same percentage of insurance buyers are paying in instalments. About a fifth (21%), meanwhile, are actively seeking out cheaper car insurance. George, however, stressed that the comparison website isn’t about what’s cheaper, but what provides better value when costs and features are assessed together.

“It’s not about finding the cheapest policy; it’s about finding a good policy but managing the cost,” George said. “Cheapest doesn’t always translate to the best value, which is why, from a Canstar perspective, we never promote cheap car insurance. We always talk about value, and we’re always very clear that value is different from cost.

“From our perspective, we look at comprehensive covers, and we always tell people, ‘Here is what we assess based on how much you pay and what you get in return for that payment’. So, all our measurements and the awards that we give out are about outstanding value.”

In September, IAG New Zealand’s AMI – sister company of intermediated brand NZI – was named car insurer of the year for 2023 by Canstar based on a unique ratings methodology that evaluates price and features across comprehensive car insurance products.

“People are getting more and more savvy online, and they’re getting online to get themselves set up for policies and cover,” George told Insurance Business. “In that space, what we believe we can offer is that value of saying, ‘We’ve done the hard work for you, and we’ve got some comparisons that you can then use’.

“Also, we’re hoping that we’re able to get to a point where we’re actually influencing both sides – we’re influencing people to make better-informed decisions about what they go for and, equally on the other hand, we’re trying to inform providers on why and how they’re being rated and what they are being rated at so we can influence positive change there as well.”

What do you think about this story? Share your thoughts in the comments below.