Venkat Raman –
The growing need to regulate the insurance sector has obliged the Reserve Bank of New Zealand (RBNZ) to reinforce stability and protect the financial markets in general and insurers in particular against late pay-outs arising out of natural and other disasters.
A number of measures announced by the central bank in recent years have tightened systems and procedures, and curiously commercial banks and financial institutions marketing insurance products and services appear to have welcomed them saying that self-regulation alone is insufficient to insure against market shocks and other untoward developments.
“Insurance is one of the most important aspects of modern business and individual life and yet it is not uncommon to find many shying away but sooner or later they would need insurance. The best way is to educate people on the benefits of insurance and the need to manage risks,” Nick Stanhope, ASB Executive General Manager, Wealth & Insurance said.
He was speaking to Indian Newslink on wide-ranging issues relating to the insurance industry in New Zealand, underlining the fact that by and large the country remains underinsured, retaining large scope for improvement.
“As a bank we emphasise the importance of insurance whenever we engage in conversations with our customers. Risk has become a major component of modern businesses and the modern communities and hence insurance in one form or the other has become imperative. Our customers understand the need to be adequately protected,” he said.
Arguably the largest bank in terms of written premium and number of customers served, ASB undertakes all types of insurance including General Insurance, Life Insurance and Travel Insurance and works with its partners to deliver quality products and services.
ASB has been involved in the insurance industry for several decades and as such carries products and services relating to Life, Hone Insurance, Contents, Motor Vehicle Loan and Mortgage, Income, Health and Disability, Travel and other areas of customer interest.
“The Bank has developed its own expertise and insurance experts provide comprehensive information and advice on an extensive range of insurance products, providing tailored recommendation with assured support services,” Mr Stanhope said.
As well as operating a well-established insurance division as a part of its Wealth & Insurance portfolio, ASB works with major insurance providers including New Zealand Insurance (now a division of IAG), Tower Insurance and Sovereign.
According to Mr Stanhope, people are increasingly becoming aware of the benefits of health insurance. “The public health system has long waiting lists, making private insurance a good alternative. People are concerned over their future and the future of their families and therefore are more attuned to life and health insurance schemes,” he said.
Well-publicised surveys have also helped to promote insurance among ordinary New Zealanders in recent years.
A PricewaterhouseCoopers Report released last month said that insurers have identified ten top risks orchestrated by technological advances and changing customer behaviour.
Called, ‘Exploring the insurance industry’s top risks: A New Zealand perspective,’ the Survey cited change management, distribution channels, cyber risk, human talent and social change as most significant risks in the country.
Mr Stanhope said that ASB is constantly adopting state-of-the-art technology to serve corporate and individual customers, with enhanced ability to respond to their demands.
Customers want insurers to offer them the same kind of accessibility, understanding of their needs, and products that fit their requirements that they have become accustomed to from online retailers and other highly customer-centric sectors, he said.
“Digital developments offer part of the answer by enabling insurers to deliver anytime, anywhere convenience; streamline operations; and reach untapped segments.”
As mentioned earlier, commercial institutions, banks in particular, are not moaning over the stringent measures being put in place by RBNZ and enforcement authorities such as the Financial Markets Authorities, not only because of the volatility of the international capital markets but also because of the nervous state of the insurance industry worldwide.
According to Mr Stanhope, the world learnt some of the most poignant and belated lessons during and after the Global Financial Crisis of 2007-2008 and the fall out of many governments and corporate giants.
“Regulators in every country have put in place a tight compliance regime that calls for strict adherence to laws and practices. The aftermath of the GFS has had financial institutions and insurance companies take extra measures to protect their business and customers. Insurance is a sector that has come under increasing scrutiny. However, at ASB, we are comfortable with all new regulatory framework since we have always followed our own strict codes,” he said.
Mr Stanhope said that KiwiSaver was a scheme that provided a sound avenue for savings with benefits of superannuation.
Describing it as a ‘painless way of saving,’ he said that ASB Securities offered ‘DIY’ investment products, with efficient, secure and continuous online support.