Insurers can sell a million new policies in next year

A new survey shows just New Zealand adults intend buying more than a million new insurance policies during the next 12 months.

Existing customers also intend to increase their existing insurance cover on 695,000 of their policies, but only cancel 94,000 policies.

Horizon Research says its survey of 2,102 New Zealanders 18+ (March 15-19, 2013) finds significant market opportunities are available for the insurance industry to improve sales and retain customers across seven main insurance product types.

This reinforces industry product sales data for the year ending December, 2012, which shows the industry emerging from the recession.

Overall across the seven products (income protection, permanent disability, trauma, life, dwelling, contents and car/ private vehicle), customers intend to:

• buy just over 1 million new policies
• increase coverage on 695,600 existing policies
• reduce coverage on 362,800 existing policies, and
• cancel 94,000 existing policies.

The highest intention to buy new policies in the next 12 months by category is in:

• Dwelling contents (194,000 people aged 18+ intend to buy)
• Car/ private vehicle (188,000), and
• Income protection (181,000).

Horizon’s Manager, Grant McInman, says the survey’s findings reinforce the Financial Services Council’s (FSC’s) quarterly measurement of traditional and risk business showing a recovery from the recession, with premiums in force rising by $120 million during the December year to a total of $1.96 billion.

The purchase of income protection would lift overall coverage among adults from 12% to 17.4%, while a further 1.5% intend to increase cover and 0.5% only cancel.

The risks of not having income protection have been highlighted in February-March by the FSC. Some of the respondent group in this March survey have had some exposure to a FSC survey on income protection issues and this may have had some influence on their buying intentions.

The survey finds Life protection coverage will increase from 48% of adults to 51.2% if respondents act on their intentions. Another 2.6% intend to increase their life insurance while 0.6% intend to cancel.

Horizon says it will be releasing more in-depth data to the finance industry, profiling the new sales and retention opportunities, in the next few days.

For further information and research detail please contact:

Grant McInman, Manager, Horizon Research

E-mail: gmcinman@horizonresarch.co.nz

Telephone: 021 076 2040