70% of people think Tower's new insurance pricing is fair

Tuesday, 8 January 2019, 3:12 pm
Press Release: Tower Insurance

70% of people think Tower's new insurance pricing is fair

Source: Tower Insurance

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A recent survey by Tower Insurance showed that 70% of people across New Zealand believe that risk-based pricing is a fair way to pay for insurance.

500 people were surveyed, with 73% of those from Auckland saying that risk based pricing is fair. Surprisingly though, a majority of people in higher-risk areas, 63% in Wellington and 65% in Christchurch, also believed risk based pricing is a fair way forward.

This survey comes after Tower announced it would be the first insurer in New Zealand to price earthquake risk more fairly.

No two properties are the same and Tower’s risk-based pricing approach means that those living in low-risk areas like Auckland, Hamilton and Taranaki will no longer subsidise those who live in high-risk locations. Those customers in low-risk areas are now receiving very competitive premiums, with recent pricing surveys showing that most Aucklanders could save with Tower’s fairer pricing.

Tower CEO Richard Harding said that Tower’s move to risk based pricing started a national conversation and it’s 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, 9 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," said Harding.

ENDS

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