NZI DELIVERS SUSTAINABLE CUSTOMER SOLUTIONS
Sustainable insurance products help NZI stand out, while helping customers reduce their carbon footprint.
It’s not enough to be sustainable yourself. You also need to help others reduce their environmental footprint.
That’s the philosophy behind NZI’s suite of sustainable insurance products, the first of their kind to be offered to NZ consumers.
NZI’s personal insurance policies reward customers for being energy efficient, at home and on the road.
Features of the products include:
- a 10% discount for those who drive less than 5,000 kilometres a year—or 15% if those customers also drive a hybrid or fuel efficient vehicle;
- home building contents cover which enables customers to replace whitegoods with energy efficient equivalents; and
- up to an additional $20,000 cover on building claims to install sustainable features when rebuilding after a total loss.
The products differentiate NZI in a business environment where customers increasingly want to deal with sustainable companies.
Our businesses in NZ are also focusing on their own environmental performance—over the last three years, office paper consumption has fallen by 26%, fuel use has dropped 21% and air travel has reduced by 12%, and we are relocating to a 5 Star Green Star rated office in Auckland.
| Financial performance |
2008 |
2007 |
| Gross written premium |
$974m |
$968m |
| Net earned premium |
$845m |
$860m |
| Insurance profit/(loss) |
$(17)m |
$86m |
| Insurance margin |
(2.0)% |
10.0% |
Major events in 2008
- Industry profitability at a seven year low*.
- Claims costs increased significantly, including severe storms and the largest losses from an earthquake for many years.
- Commercial insurance market remained soft, but is improving.
Operational review
GWP grew 2.4% in local currency terms during the year. Offsetting this growth, claims costs increased almost 14% more than the previous year to over $600 million, which contributed to our NZ businesses recording a loss.
The increased claims resulted primarily from severe natural catastrophes, including extreme floods in Northland and an earthquake in Gisborne. Combined, these events cost the general insurance industry more than $90 million*. We also experienced an unusually high number of claims throughout the year, and repair costs rose. As a result, premiums increased across most insurance classes.
In a year of significant claims and hardening rates, it’s pleasing to see customer satisfaction remained high at 87%. Retention also remained stable.
In our intermediated business, operating under the NZI brand, we grew our share in key segments, expanded our product range and focused on deepening our strategic business partnerships. We are proud that NZI was awarded Insurer of the Year by the Insurance Brokers Association.
In our direct business, under the State brand, customers were migrated to a new technology platform which will allow a more granular approach to pricing. We were not active in marketing during the migration which contributed to slower growth, but a new campaign is expected to support growth in this business.
Outlook for 2009
Our GWP growth and insurance margin are expected to improve as NZI benefits from hardening commercial insurance rates and our direct business regains momentum.
In addition, productivity initiatives have reduced our cost base, and we expect annual savings of $16 million per annum before tax going forward from 2009.
