70% of people think Tower’s risk-based pricing is fair, survey finds

A large majority of New Zealanders, 70%, believe that risk-based pricing is a fair way to pay for insurance, a new survey has revealed.

The survey, commissioned by Tower Insurance, comes after its recent announcement that it would adopt risk-based pricing models, which means insured homeowners situated in high-risk areas can expect increases in their premiums.

The survey of 500 New Zealanders, found 73% of those from Auckland thought risk-based pricing is fair. Perhaps surprisingly for some, the majority of people in higher-risk areas, 63% in Wellington and 65% in Christchurch, also believe risk-based pricing is a fair way forward.

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, Tower CEO Richard Harding said.

“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,” Harding noted. “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 added.