The shifting insurance landscape in New Zealand has opened up a range of possibilities for insurance brokers, allowing them to provide better offerings to their clients.
Commercial insurance has long been dominated by two major insurance firms. For years, Suncorp Group (Suncorp), through Vero and AA Insurance, and Insurance Australia Group (IAG), through AMI and NZI, have owned a major share of the market.
However, experts say that this market concentration has helped insurance brokers to create more opportunities.
According to Paul Munton, a former executive general manager of Rothbury Insurance Brokers, the role of brokers has never been more important in the past five decades. In 1979, insurers were predominantly American or British companies with many offices across the country.
New laws have been implemented since then, and many insurers centralised their operations, moving into the major cities. With that, an opportunity arose for insurance brokers to fill the void.
“We had a lot of insurance players in the market … Then, with the consolidation within that market, we saw a lot of them disappear,” he said.
Consolidation efforts
According to Munton, the consolidation of insurance companies happened in the 1980s and well into the 1990s. During that time, brokers provided a local presence, helping businesses and individuals access insurance services and guidance at a convenient office.
“The market has shifted to clients that want advice, and brokers are giving advice,” said Munton.
“I think there's been more acceptance of the broker, the role of the broker and where the broker can be the client advocate.”
Additionally, brokers were sought after to provide advice to a large range of businesses, including smaller SMEs. This allowed small businesses to get risk advice and tailored cover without going to bigger broking houses.
“Now we're finding Joe Average might want to use a broker because he wants advice as the market has become complex,” said Munton.
“It’s the complexity of risks that’s shifted and there’s a push for greater operational efficiency that is also driving more demand for brokers.”
What to look out for
As customer needs evolve, keeping covers as affordable as possible will be a key focus for insurance brokers, as well as working hard to tailor a customised plan for their clients. With more businesses facing financial pressures, Munton says the key is to address the customer’s fundamental need.
“What are the biggest needs that you can protect? … because if you can't afford to pay a premium, how are you going to be able to afford to rebuild your house or your business?” he said.
Climate risks are also a significant consideration, as many homeowners and businesses look towards securing their properties against the changing weather conditions and earthquake risks.
“The insurance companies have got to tailor their solutions around the environment … I think it's going to take more parameters around the qualification of where are you going to mature and on what basis,” he said.
How Bonded NZ tailors covers for businesses
At Bonded NZ, we understand the importance of offering tailored solutions. Our team focuses on partnerships rather than just a product, so you can secure your business just how you want it.
Our team has decades of experience in the construction and business sector. Over the years, we’ve helped thousands of businesses understand their risk and advice on the protection they need.
We are also not tied to any one provider as independent brokers. For you, this means access to a wider range of insurers for covers that are suitable for your business or project.
And if you ever need to make a claim, our dedicated, full-time claims manager will support and guide you through the process.
For more information about our range of covers for businesses, book a meeting with our team today.
