Tower Insurance says its surveys show 70% of people across New Zealand believe that risk-based pricing is a fair way to pay for insurance.

Five hundred people were surveyed, with 73% of those from Auckland saying that risk-based pricing is fair. 

But a majority of people in higher-risk areas also believed risk based pricing is a fair way forward, 63% in Wellington and 65% in Christchurch.

It comes after Tower announced it would be the first insurer in New Zealand to price earthquake risk in a way it said was fairer.

The insurer said no two properties were the same and Tower’s risk-based pricing approach meant that those living in low-risk areas such as Auckland, Hamilton and Taranaki would no longer subsidise those who lived in high-risk locations. Those customers in low-risk areas were now receiving more competitive premiums.

Tower chief executive Richard Harding said Tower’s move started a national conversation and it was pleasing to see that the majority of people surveyed support this change.

"Eighteen months ago the Commerce Commission declined Vero’s proposal to buy Tower because they saw us as a true New Zealand based competitor to the two big Australian insurers," said Harding.

"Our move to risk-based pricing for earthquake was market leading and we can now offer house insurance cheaper than our competitors in certain parts of the country.

"In fact, our analysis shows that in Auckland, nine out of 10 State customers would actually receive lower premiums with Tower.

"As well as benefitting customers, fairer pricing encourages the government to place more emphasis on understanding and planning for the risks New Zealanders face when natural disasters hit," he said.