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Insurers need to improve consumer confidence

New Zealand insurers need to work to improve consumer confidence in their products, the results of a new survey suggest.

Tuesday, September 29th 2009, 9:13PM 1 Comment

by Sonia Speedy

The inaugural RaboPlus Financial Confidence Index shows that only 39% of those who took part in the nationwide survey agreed, or strongly agreed, with the statement that they felt confident health insurance providers would honour valid claims. Life insurers fared little better at 52%, while general insurers shined in comparison at 68%.

Meanwhile, 17% actively disagreed with this statement for life insurers, 15% for health insurers and 12% for general insurers.

However, Roger Styles, executive director of the Health Funds Association of New Zealand, points out that of the 1,000 people surveyed, 399 of them were health insurance customers. This equates to the 39% who had confidence in the payment of valid health insurance claims and says it suggests it had actually done better than life and general insurance in this area. Life insurance customers make up 607, or 61% of the 1000 people surveyed and general insurance customers, 878, or 88%.

Overall, insurers fared fairly well when it came to confidence in financial institutions generally. While the likes of finance companies and sharebrokers scored poorly on the financial confidence index at -20 and +2 respectively, insurers fared much better, with general insurers ranked the highest at +42 and life insurers and health insurers at 28% and 24%.

Investment Savings and Insurance Association (ISI) chief executive Vance Arkinstall acknowledged that there are cases "from time to time" where issues arise such as non-disclosure, or around more complicated products such as income protection, which mean claims cannot be settled. 

"But far and away the bulk of the business we thought that they were settled very, very effectively," Arkinstall says.

He adds that an upcoming ISI board strategic planning session will look into consumer confidence and trust, and the consumer perception of these for the industry.

"We want to find out how the world perceives us and what we can do to improve whatever those outcomes are," Arkinstall says.


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Comments from our readers

On 2 October 2009 at 12:38 pm Darcy Sollitt said:
Good article and I have one question there where Vance goes on about claims that are not paid due to non-disclosure. The question is "What about claims that are declined because of so called non-disclosure where items where disclosed and/or the proposal was incomplete BUT the insures Prudent Underwriter did not pick up this and issued the policy? Does this give the insurer the right to VOID a policy? Now what happens in this scenario Vance?
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