The founders of NZI (then New Zealand Insurance) were unlikely to have foreseen a future when insurance advice came via the mouth (or, rather, speakers) of robotic advisers. In fact, when the company was established in 1859, the word “robot” wasn’t even in the common vernacular.
But it’s technologies such as these that will provide the industry with fresh challenges as we head towards the mid 21st century. And NZI’s executive general manager Garry Taylor says that these will be met head on by a company that’s celebrating 160 years in the New Zealand insurance business.
“We have a great history and we need to acknowledge this is a significant milestone for us. But we can’t rest on our laurels.
“We operate in such a dynamic and innovative industry, and need to keep ahead of the changes. At the same time, we need to bring to life the story of our history, and celebrate the trust and confidence we have earned.”
New Zealand in the 21st century is “a much riskier place” than it was at NZI’s inception, says Taylor. Climate change, extreme weather events, and recently, the horror of a terror attack are creating an increasingly complex environment for insurance providers.
But as the oldest insurance brand in New Zealand, NZI has weathered many (literal and figurative) storms.
It was there for the Napier earthquake in 1931, and withstood the shock brought on by the destruction of the town and the deaths of 256 people. It was there through the Great Depression, wars, cyclones, and remained strong through corporate changes such as its merger
with South British Insurance in 1981 and the acquisition by IAG in 2003.
Taylor believes that while its owners are located elsewhere, NZI remains “an insurer for all New Zealand”.
“As an example, some of the brands aren’t insuring in Wellington due to the earthquake risk; but we have been there for all the disasters and will continue to be.”
But with an increased premium. The increases by the IAG brands in natural disaster or weather prone areas have raised questions in the mainstream media in the past few months. Taylor says that this reflects a move towards transparent, risk-based policies, and that educating the general public around this is vital.
“If someone buys a brand-new home in a flood prone area, it makes sense that the premiums will be higher. But this may level out with reduced premiums for homes in less risky areas.”
NZI will be spending the next 12 months celebrating their big birthday with an internal roadshow, the aim of which is to reflect on the achievements of the past and consider their wider culture and values.
“This will be a great opportunity to acknowledge the past and celebrate our history, and what we stand for.”
It’s a good time to be taking stock, with the Financial Services Legislative Amendment Act looking to change the way in which advisers and insurers engage with their customers and bring more transparency to the industry.
Taylor sees this as an excellent opportunity to look at the industry as a whole and make sure advisers are putting clients at the forefront. “Having transparency, openness and clear communication as a bottom line can only do the industry good.
“As I see it, there should be a sort of conduct test that can withstand the court of public opinion, which is very vocal. The simple test is this: if you are not prepared to advertise aspects of a policy on the front page, don’t use it.”
He views the role of the adviser as being the conduit for knowledge, offering clients solutions that are spelled out in clear language and avoiding pitfalls that can come when the minutia of a policy isn’t made apparent from the outset.
“Transparency is extremely important. The changes that the act is proposing will put more ownership on the insurance brands to encourage all advisers to communicate policy details well.”
While there have been huge challenges industry-wide due to earthquakes, increased weather events, and lately the terrorist attack in Christchurch, they have brought with them opportunities for NZI and the wider industry to learn and respond to change.
“The earthquakes necessitated that insurers move from open-ended home insurance to set sum limits. And the Earthquake Commission changes have given insurers like NZI the opportunity to manage claims first after an incident like an earthquake.
“We can use these challenges to change the way we operate as an industry and learn from them.”
He goes on to say that NZI led the industry when it waived its terrorism exclusions after the tragic mosque shootings in March.
“This was a new event for us, and for New Zealand. It led us to explore the original extent of the policy wording and it felt like an opportunity for us to be purpose led. The policy is being reviewed; it’s complex as the exclusion is wrapped up in the relationship with reinsurers, but it is being addressed.”
“The waiver was the right thing to do and it will lead to changes in the future.”
Technology and the changing face of the workforces are other key areas in which Taylor sees challenges arising. As automation of the workplace increases, there will be huge implications for all industries. Robo-advice is definitely on the cards, but for more complex
insurance needs, the relationship between adviser and customer will remain vital.
Cyber risk is another area in which insurers need to stay ahead of the game. Developing products to help companies deal with cyber risks is a tricky business – risks are constantly changing and morphing – but IAG have specialists based in Australia who are charged with researching and developing products that mitigate future cyber threats.
Looking back is often a good way to inform the way in which a company looks forward. During NZI’s 160-year celebration roadshow staff nationwide will be able to consider their values and draw upon the strength and knowledge from 160 years at the coalface.
“We are a market leader, with a proven record of proactively manage challenges,” says Taylor. “And we need to use knowledge to explore thoroughly who we are and where we are going.”
He says that popular psychologist and speaker Nigel Latta has created a bespoke video for NZI that will be played during the roadshow.
“In it he talks about working with people from all walks of life and how relationships are the most important things. He says that it’s important for people to be themselves and understand what others are thinking, before you try to change it.”
This, in a nutshell, is what NZI is looking to achieve: great relationships with advisers, customers and those they work with. And by using the gravitas that comes with decades of experience, Taylor foresees a positive and innovative future.
“We want NZI to remain a trusted brand that people can have confidence in, especially at claims time,” he concludes.
