With much global debate focussing on what changes will affect the insurance industry,
NZI EGM Travis Atkinson says the general consensus is that change is certainly inevitable.
Atkinson said examples of change were already occurring in motor vehicle insurance with automation and driverless vehicles becoming a reality, and the sharing of assets where users pay for what use was growing.
“Just recently I was drawn into a conversation about this generation of young children and how they may never need to hold a driver’s licence, let alone own their own motor vehicle,” he said. “While this is hard to believe when most of us have grown up with motor vehicles it may well become the norm.
“Change may in fact not be years away, but just around the corner.”
He cited the fact there were driverless trucks already being used in Europe and driverless taxi services started up in Pittsburgh, Singapore and Dubai.
And with Uber quickly becoming mainstream in New Zealand, the momentum of electric vehicles was increasing, with large corporates such as Air New Zealand leading the way with the rollout of their latest electric powered fleet.
Atkinson explained what effect this was having on them as an insurer.
“We must evolve and meet the changing needs of our customers. NZI is poising itself to do this.
“Across the entire
IAG enterprise we’ve been putting together a Program of Work to drive simplicity into our business by consolidating our systems and changing the way we work.
“We’re partnering with other organisations to drive our competitiveness and increase value where we can.”
However, he said today’s challenges could not be ignored.
Since expressing
his views on increased motor claims costs in Insurance Business in August, Atkinson said he had been inundated with people’s experiences of minor accidents that had resulted in high repair costs.
Airbags deploying in these accidents is just another example that had been given to him.
“Increased costs aren’t just happening in the motor world though,” he explained. “We’re seeing it across home and contents as well.
“This is largely influenced by strong demand and insufficient supply; the cost of building supplies and labour costs; increased compliance costs for building repairs following the new Health and Safety legislation – and in my view the true impact of Health and Safety hasn’t even hit us yet; changes in consumer behaviour; and new emerging risks.”
New risks certainly included methamphetamine contamination, he said, but also shared models, where putting a home on to Airbnb was leading to questions regarding policy coverage.
The ownership of technology was also having an impact.
“The average household now owns multiple mobile phones, laptops and tablets,” he noted.
“The way these are being used outside the home means the increased frequency of loss and damage and that’s continuing to rise.
“I think this particularly applies to mobile devices where our policy coverage fundamentally hasn’t changed in years yet everyday usage of these items is now the norm.”
Atkinson said the combination of new business models and an increasing shared economy, where people owned less and shared more, and where the lines were blurring between what were commercial assets and what were personal, were converging to change the shape of things to come.
“[These] are just some of the trends I believe will drive change and the way we write policies in the future.
“Without change there can be no innovation and without innovation there is no progress.”
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