New Zealand has one of the most concentrated general insurance markets in the world, and it doesn’t help that house and car insurance companies are keeping their prices in the dark, online price comparison site Glimp says.
In 2010, electricity companies started making their prices more transparent and accessible to consumers, and Glimp co-founder Michael Speight said he wants to see the same happen in the insurance industry.
Speight said he believes New Zealanders need to be able to shop around for the best insurance deals, and the availability of transparent price and service plans will mean cheaper insurance costs as insurers compete for customers.
He said getting insurance companies to become more transparent about their pricing, however, “won’t be easy.” He recalls how hard it was trying to
convince electricity retailers to give them information about their pricing.
“The electricity retailers were very resistant to us,” he explained. “We were one of the first ones to ask for the pricing, and we had to go to the Electricity Authority to make them give it to us.” He believes it will be much the same with insurance companies.
“The market for personal house and contents insurance is already highly concentrated and uncompetitive,” added Massey University’s School of Business Dr Michael Taylor. “The current market structure can be characterised as a duopoly. My figures show that
IAG has 50%,
Suncorp has 28%,
Tower 7%, and
FMG 4%.”
With four companies controlling the entire insurance industry in New Zealand, prices remain consistently high, Taylor said.
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