Post-quake reputation worries NZ insurers
Natural catastrophes again top the list of risks that concern New Zealand insurers, according to PricewaterhouseCoopers’ (PWC) biennial survey.
The report – Exploring the Insurance Industry’s Top Risks: A New Zealand Perspective – is a supplement to PWC’s global Banana Skins study.
Although the focus of concern remains natural catastrophes, nearly five years on from the Canterbury earthquakes the emphasis has shifted to reputational damage: several respondents fear the industry’s image has been damaged by its response to the quakes.
“People in Christchurch do not trust the general insurance industry,” one told researchers.
PWC Insurance Sector Leader Karl Deutschle says many insurers are seeking ways to settle claims more quickly and effectively after natural catastrophes.
The impact of technology on insurance companies and consumer behaviour is also reflected in the top 10 risks.
“Customers want insurers to offer the same kind of accessibility, understanding of their needs and products that fit their requirements that they’ve become accustomed to from online retailers and other highly customer-centric sectors,” Mr Deutschle said.
He warns the industry is “at the tipping point” as it grapples with the impact of new technology, new distribution models, changing customer behaviour and more exacting local and global regulations.
“Digital developments offer part of the answer, by enabling insurers to deliver anytime-anywhere convenience, streamline operations and reach untapped segments,” Mr Deutschle said.
Change management has risen to become the second-highest risk in the New Zealand survey, up from 18 two years ago. Concerns include commoditisation of the personal insurance environment and disintermediation of traditional distribution models.
One general insurer told PWC: “Insurers appear to be slow in adopting web-based technologies to meet customer needs. Intermediaries jealously guarding their customer data may be partly to blame.”
Top risks 2015: New Zealand v Australia
- Natural catastrophes (Australia 15)
- Change management (6)
- Distribution channels (3)
- Cyber risk (1)
- Reputation (10)
- Human talent (8)
- Product development (7)
- Long-tail liabilities (9)
- Quality of risk management (18)
- Social change (13).