Accident Insurance Pushes NZI To Number One
NZI's move to a new head office in Queen Street Auckland has coincided with the company becoming the country's largest fire and general insurer.
Gross Premium Written (GPW) of $45 million from the recently deregulated accident insurance market combined with fire and general GPW of $346 million moves NZI into the number one position.
According to NZI Chief Executive, George Berrie, the result was unexpected, as the company had not gone into the ACC insurance market to gain market share.
"As New Zealand's largest commercial insurer it was important we were in this market to protect our existing commercial account. This decision, in turn, determined our strategy to write this business in a targeted fashion adopting a very focused and firm underwriting stand in a market, which worldwide, has proved challenging for insurance companies from a profit perspective.
"We wrote enough business in the market to be credible with our customers and, at the same time, priced it sensibly at a level which is sustainable long term, despite intense market pressure to drive rates down. We now have a balanced book of business across personal and commercial lines with the right mix of short and long-tail business which is as close to perfection as it is likely to ever get in insurance."
Mr Berrie said the privatisation of AI has resulted in a number of benefits including cheaper premiums for employers. In addition the private sector has to adopt a disciplined approach to underwriting good risks and penalising poor risks where risk management is inadequate, thus making New Zealand a safer place to work.
"Historically, the AI market has been very difficult territory for insurance companies to be in. The cost of setting up this trading environment in New Zealand has not been insignificant and any future Government considering unravelling this legislation in the short term would have to weigh up the impact on the private sector," said Mr Berrie.