Trade Me calls for more transparency in financial services sector; labels itself 'pro-consumer' as it taps into insurance and peer-to-peer lending

Trade Me calls for more transparency in financial services sector; labels itself 'pro-consumer' as it taps into insurance and peer-to-peer lending

By Jenée Tibshraeny

A newcomer to New Zealand’s insurance industry is taking aim at the market leaders for their lack of transparency.

Trade Me Insurance general manager, Conor Sligo, says Trade Me had to can its idea of creating a general insurance comparison website because the likes of Insurance Australia Group (IAG) and Vero refused to play ball.

These major insurers, which with their partners and associated companies hold over 70% marketshare, didn’t want to provide Trade Me with the information it needed to set up a website that compares premium prices and policy cover, between different insurers.

Trade Me bought LifeDirect – a website that does this for life and health insurance in 2013.

“There’s a general stance from the big players that they just don’t want to participate in that kind of open comparison type environment”, Sligo says.

“I think it would be a fantastic pro-consumer thing for people to be able to quickly and easier compare the options that are available.

“I definitely think that a company that’s confident in its products and its proposition and its price, should welcome that, as have the life and health insurers.”

Sligo says he’s aware it’s unproductive to simply compare prices and not the features provided by a certain type of cover, so says the comparison website wouldn’t have focussed solely on price.

“I’d never say never on it [the comparison website]. I think it’d be a fantastic addition to the insurance landscape and we’d be all for it if other partners would be up for it.”

Gap in market for better online insurance

Sligo says Trade Me decided to go all out and become an insurance provider itself, after hitting a wall with the comparison website idea. It launched Trade Me Insurance, which sells car, home and contents insurance underwritten by Tower, in mid-August.

He says Trade Me was prepared to tackle the big guys in the market – IAG and Vero – as it saw room for a more online-focussed insurer.

“It seemed to us that [concentration within the market] was leading to a bit of a lack of innovation, especially in that kind of transition to online that more and more people are expecting”, he says.

“They’re [IAG and Vero] improving their online offerings, but I think that hasn’t happened quickly, and there’s certainly a segment of the market that really does just want to do everything online, and that is the market we’re hoping to look after.

“We thought that given creating good online experiences is kind of in Trade Me’s DNA, we could add a bit of value to that part of things”, he says.

Furthermore, he points out Trade Me is a forum people use to buy and sell assets that often need insurance, so tapping into the insurance market was a good fit.

Trade Me Insurance calls for more transparency among financial service providers

Trade Me has also tapped into the financial services sector by buying a 15% stake in Harmoney, the peer-to-peer lender, in January.

Sligo says both Harmoney and Trade Me Insurance fit in well with Trade Me’s brand of being “pro-consumer” and trying to create “open and straight-up marketplaces”.

“I think consumers haven’t been that well served in the past when it comes to transparency of information, transparency on pricing and that kind of thing”, he says.

“I think that’s something Trade Me can really add value to… if we can see an opportunity to do that more in the financial services space, then we’ll be all for it.”

Sligo won’t comment on whether Trade Me is looking to increase its stake in Harmoney.

As for becoming a KiwiSaver provider, he says the company hasn’t considered this. 

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"Sligo says both Harmoney and Trade Me Insurance fit in well with Trade Me’s brand of being pro-consumer" - really - isn't harmony a loan shark outfit?

As a Harmoney participant on the lending side, I don't see it as any more "loan sharking" than what the banks provide. Actually, the lending process is quite transparent. And I can see the similarities with Trade Me, a lender and a borrower transact with an intermediary executing the transaction and managing repayments. Based on the number of borrowers, I would think that opening a new channel for borrowing is pro-consumer. Compared to traditional loan sharks, as a borrower, I would much rather participate with Harmoney.

The cynic in me doesn't think the big players want to be part of a comparison website because it would make shopping around to easy for customers. Comparing just price isn't the bottom line, it's insurance and people would (you'd hope) look at cover and all the wee T & C's that go with it...
I'm currently in the UK, moving back to NZ soon, and comparison websites are everywhere here, for just about everything too...it's great. Makes shopping around great and means you can find out about the smaller companies you may not have heard of or turned up in a generic google...

Stroke of genius - every car every house every boat every caravan every every thing is bought or can be bought through trademe. They have just captured the entire insurance industry in one swoop
Please give me a chance to invest in that venture - guaranteed success
President of Property

Has not really been a stunning investment so far, they have failed to innovate as fast as offshore digital companies... dare I say it , I think their owners have been milking the cows vs investing in value added products/services ....

https://nz.finance.yahoo.com/q/bc?s=TME.NZ&t=5y&l=on&z=l&q=l&c=

They paid a shed load for the brand so needed to get money back. Now they have cottoned onto to leverage, but I think you can only do that if the areas you leverage into have substantial margins. It would be interesting to know just how much NZers are being milked, it seems substantial in many areas due to lack of competition stopped by monopolies/vendors.

The crazy thing about TM is there are items on there that you can get from the likes of dx.com for 1/2 the price and for others typically 10~15% cheaper in NZ if you look around, or indeed some bargins.