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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