1 00:00:00,400 --> 00:00:01,560 Speaker 1: Heller Duper see Alan. 2 00:00:01,760 --> 00:00:04,440 Speaker 2: Yet another town is being abandoned, at least new policy 3 00:00:04,440 --> 00:00:07,120 Speaker 2: wise by AA Insurance. The insurer has announced it will 4 00:00:07,120 --> 00:00:09,880 Speaker 2: no longer be offering new home insurance policies in Blenham, 5 00:00:09,960 --> 00:00:12,080 Speaker 2: after doing the same to wood End in North Canterbury 6 00:00:12,119 --> 00:00:14,640 Speaker 2: and Westport in order to manage its risk now. At 7 00:00:14,680 --> 00:00:16,680 Speaker 2: the same time, the government has announced a review into 8 00:00:16,720 --> 00:00:18,400 Speaker 2: the sector to look at where the home insurance is 9 00:00:18,440 --> 00:00:21,840 Speaker 2: priced fairly and affordably. Chris Farfoy is the Chief Executive 10 00:00:21,840 --> 00:00:23,200 Speaker 2: of the Insurance Council and. 11 00:00:23,160 --> 00:00:25,680 Speaker 1: With us how far good arsenation, how are you hea that? 12 00:00:25,760 --> 00:00:28,200 Speaker 2: And well thank you. Do you know what AA's reason 13 00:00:28,240 --> 00:00:30,440 Speaker 2: for pausing that the new policies and Blennim is. 14 00:00:31,680 --> 00:00:35,000 Speaker 1: Look, they've said, and I will reiterate that, you know, 15 00:00:35,080 --> 00:00:37,760 Speaker 1: they feel that they've reached the maximum threshold for exposure 16 00:00:38,280 --> 00:00:42,440 Speaker 1: in that market. So that's obviously a business decision that 17 00:00:42,479 --> 00:00:44,479 Speaker 1: they have made, and they've obviously made it in a 18 00:00:44,520 --> 00:00:47,720 Speaker 1: couple of other markets recently. But from time to time 19 00:00:49,000 --> 00:00:53,240 Speaker 1: members do review their exposure in particular markets. In this instance, 20 00:00:53,280 --> 00:00:55,960 Speaker 1: AA has obviously taken on their own business decision, But 21 00:00:56,000 --> 00:00:58,120 Speaker 1: I just want to reiterate that they're still in their 22 00:00:58,160 --> 00:01:02,480 Speaker 1: supporting their current members, members and customers, and we ask 23 00:01:02,520 --> 00:01:05,080 Speaker 1: people remind people to shop around. There's still other insurers 24 00:01:05,160 --> 00:01:07,080 Speaker 1: in those markets who are offering insurance. 25 00:01:07,080 --> 00:01:09,760 Speaker 2: I'm just what I'm confused about. Is it current exposure 26 00:01:09,760 --> 00:01:12,200 Speaker 2: to what is it? Exposure to flooding? Is it exposure 27 00:01:12,240 --> 00:01:13,520 Speaker 2: to seismic risk? 28 00:01:13,560 --> 00:01:15,920 Speaker 1: Word? Is it? I think what they said in particular 29 00:01:15,920 --> 00:01:18,319 Speaker 1: markets and some instances it might be flooding and others 30 00:01:18,400 --> 00:01:20,760 Speaker 1: that might be seismic. So it really depends on the 31 00:01:20,880 --> 00:01:23,120 Speaker 1: risk of the year, Heather. But in those in those 32 00:01:23,160 --> 00:01:25,840 Speaker 1: in those markets, they think they've topped out. 33 00:01:26,000 --> 00:01:29,840 Speaker 2: Explain something to me, though, why don't they just, you know, 34 00:01:30,120 --> 00:01:33,480 Speaker 2: raise the raise the price of the premium, like just 35 00:01:33,520 --> 00:01:36,840 Speaker 2: make it make it expensive to reflect the risk instead 36 00:01:36,840 --> 00:01:38,639 Speaker 2: of instead of stopping all together. 37 00:01:39,319 --> 00:01:41,480 Speaker 1: Look, they all make their own business decisions about how 38 00:01:41,600 --> 00:01:43,720 Speaker 1: much's exposure they want to have on their books, and 39 00:01:43,760 --> 00:01:46,880 Speaker 1: sometimes their reinsurers can say to them, look, in this 40 00:01:47,000 --> 00:01:51,640 Speaker 1: area will reinsure you if we'll give you the reinsurance 41 00:01:52,000 --> 00:01:54,760 Speaker 1: capacity if you keep it to this. And I don't 42 00:01:54,800 --> 00:01:57,880 Speaker 1: know if that's the case, but in many instances when 43 00:01:57,880 --> 00:02:00,000 Speaker 1: they speak to their insurance they say, look, in this area, 44 00:02:00,160 --> 00:02:02,360 Speaker 1: we can reinsure this much, and if they don't have 45 00:02:02,480 --> 00:02:05,280 Speaker 1: enough insurance reinsurance capacity, then they will do in some 46 00:02:05,400 --> 00:02:08,520 Speaker 1: instances what they've done. Now. I don't know precisely the decision, 47 00:02:08,840 --> 00:02:12,360 Speaker 1: but they've obviously said in a general sense that they've 48 00:02:12,440 --> 00:02:15,600 Speaker 1: met that, you know, they've met the threshold of their 49 00:02:15,960 --> 00:02:17,800 Speaker 1: limit of exposure in some of those areas. 50 00:02:17,880 --> 00:02:21,600 Speaker 2: Do you foresee a future where insurance just becomes so 51 00:02:21,720 --> 00:02:25,960 Speaker 2: expensive that we that most of us ought not to 52 00:02:25,960 --> 00:02:28,200 Speaker 2: be insured anymore in this country? Is that possible? 53 00:02:29,160 --> 00:02:30,720 Speaker 1: Look? We nowhere near that, and that's why I want 54 00:02:30,720 --> 00:02:32,880 Speaker 1: to retroade. This is just one insurer, and we've still 55 00:02:32,919 --> 00:02:36,200 Speaker 1: got twenty one other insurance as Insurance Council members who 56 00:02:36,240 --> 00:02:40,320 Speaker 1: continue to offer insurance across the board. What we've been 57 00:02:40,320 --> 00:02:41,640 Speaker 1: saying for some time, and I think I've been on 58 00:02:41,680 --> 00:02:44,959 Speaker 1: the show hither, is that there are things on the horizon, 59 00:02:45,160 --> 00:02:48,240 Speaker 1: like extreme weather that we expect to happen more often 60 00:02:48,320 --> 00:02:51,160 Speaker 1: and to be more extreme that that will be a challenge. 61 00:02:51,160 --> 00:02:52,600 Speaker 1: For instance, it's not just that far. 62 00:02:52,840 --> 00:02:54,440 Speaker 2: I mean, I was talking about this. I'm sorry to 63 00:02:54,480 --> 00:02:56,520 Speaker 2: interrupt you, but I was talking about this on the 64 00:02:56,520 --> 00:02:59,000 Speaker 2: show earlier this week. I've got I've got a twenty 65 00:02:59,080 --> 00:03:01,480 Speaker 2: year old Jeep rang that you know, I only drive 66 00:03:01,520 --> 00:03:03,320 Speaker 2: a couple of months a year or whatever. But the 67 00:03:03,360 --> 00:03:05,440 Speaker 2: insurance cost of that, I mean, this is and this 68 00:03:05,520 --> 00:03:07,480 Speaker 2: is not related to whether, but the insurance cost of 69 00:03:07,480 --> 00:03:09,920 Speaker 2: that is now so high and even on a good wicket. 70 00:03:10,080 --> 00:03:11,480 Speaker 2: I look at that, I go, that's not worth it. 71 00:03:11,520 --> 00:03:14,320 Speaker 2: I might go third party. So it's across everything, isn't it. 72 00:03:14,320 --> 00:03:17,320 Speaker 2: It's across home insurance for whether related stuff or earthquake stuff. 73 00:03:17,360 --> 00:03:20,880 Speaker 2: Cars are expensive now, health insurance is expensive. Medical insurance 74 00:03:20,919 --> 00:03:23,080 Speaker 2: is expensive. It's starting to feel a little bit and 75 00:03:23,120 --> 00:03:25,080 Speaker 2: tell me if I'm wrong, but it's starting to feel 76 00:03:25,080 --> 00:03:27,360 Speaker 2: a little bit like insurance companies are taking the mickey 77 00:03:27,400 --> 00:03:29,120 Speaker 2: and seeing how far they can push us before we 78 00:03:29,200 --> 00:03:29,679 Speaker 2: drop off. 79 00:03:30,320 --> 00:03:33,000 Speaker 1: Look, of course i'd say that, but say this, but 80 00:03:33,240 --> 00:03:37,440 Speaker 1: no they're not. We're reflecting the risks that are eminent 81 00:03:38,200 --> 00:03:41,480 Speaker 1: and real for a lot of customers, especially when it 82 00:03:41,520 --> 00:03:44,680 Speaker 1: comes to high risk areas to flooding, etc. It's becoming 83 00:03:44,720 --> 00:03:48,240 Speaker 1: a real challenge with cars. It depends on who's driving 84 00:03:48,320 --> 00:03:51,600 Speaker 1: or what you've got. But you know, again, I want 85 00:03:51,640 --> 00:03:54,200 Speaker 1: to reiterate the importance of doing a bit of shopping 86 00:03:54,200 --> 00:03:57,280 Speaker 1: around in those areas where it's become a challenge for 87 00:03:57,320 --> 00:03:59,560 Speaker 1: some people who are looking to AA. There are other 88 00:03:59,600 --> 00:04:01,520 Speaker 1: insurance who I'm sure are still in the market who 89 00:04:01,600 --> 00:04:04,120 Speaker 1: can offer as well. But you are, you know, the 90 00:04:04,200 --> 00:04:06,640 Speaker 1: government is looking at a review or some of the 91 00:04:06,720 --> 00:04:09,720 Speaker 1: drivers of the premiums, and we've been saying for some 92 00:04:09,760 --> 00:04:12,400 Speaker 1: time there are some drivers of costs that we want 93 00:04:12,440 --> 00:04:15,320 Speaker 1: to look at too, like well at home. Well, people 94 00:04:15,320 --> 00:04:17,280 Speaker 1: who might be at home at the moment saying yes, 95 00:04:17,400 --> 00:04:19,359 Speaker 1: I want to know about that might not realize that 96 00:04:19,400 --> 00:04:22,560 Speaker 1: about forty five forty six percent of their house insurance 97 00:04:22,640 --> 00:04:25,760 Speaker 1: is actually the likes of levies and taxes. So there's 98 00:04:25,760 --> 00:04:28,400 Speaker 1: a fends levy for foreign emergency, that in Natural Hazards 99 00:04:28,400 --> 00:04:32,760 Speaker 1: Commission levy GST. So there's a lot of cost in 100 00:04:32,839 --> 00:04:35,760 Speaker 1: premiums for a house that actually the insurance sector doesn't control. 101 00:04:35,839 --> 00:04:37,800 Speaker 2: What about my power? What's going on there? 102 00:04:38,480 --> 00:04:40,240 Speaker 1: Well, you know, actually if you look at the inflation 103 00:04:40,320 --> 00:04:42,919 Speaker 1: figures that came out last month, here there's some of 104 00:04:42,960 --> 00:04:46,479 Speaker 1: the I think car insurance actually got a lot cheaper 105 00:04:46,560 --> 00:04:51,159 Speaker 1: in the last quarter compared there. And it does depend 106 00:04:51,240 --> 00:04:54,000 Speaker 1: on who you're looking to shop with and what your 107 00:04:54,000 --> 00:04:56,120 Speaker 1: scenario is, you know, if you're a good driver and 108 00:04:56,160 --> 00:04:58,200 Speaker 1: you've got a relatively cheap card, then you won't be 109 00:04:58,200 --> 00:05:02,200 Speaker 1: paying much. But if you've got and challenges then obviously 110 00:05:02,240 --> 00:05:04,440 Speaker 1: the insurance company is going to look at you a 111 00:05:04,440 --> 00:05:05,120 Speaker 1: little differently. 112 00:05:05,200 --> 00:05:06,640 Speaker 2: All right, listen, it's good to talk to you. Thank 113 00:05:06,640 --> 00:05:09,560 Speaker 2: you for your time. It's Chris Fafay, Insurance Council Chief Executive. 114 00:05:09,600 --> 00:05:11,400 Speaker 2: I don't know, does that make you feel better about 115 00:05:11,440 --> 00:05:12,440 Speaker 2: the situation? Probably not. 116 00:05:13,160 --> 00:05:16,320 Speaker 1: For more from Hither Duplessy Allen Drive, listen live to 117 00:05:16,440 --> 00:05:19,440 Speaker 1: news talks. It'd be from four pm weekdays, or follow 118 00:05:19,480 --> 00:05:21,200 Speaker 1: the podcast on iHeartRadio.