WEBVTT - Car insurance for your Summer roadie? Coverage vs cost explained with Cove 0:00:04.000 --> 0:00:07.040 Curta and welcome to the special episode of Shared Lunch. 0:00:07.520 --> 0:00:10.520 Today we're talking about the world of insurance. We'll be 0:00:10.560 --> 0:00:15.080 diving into specifically car insurance, why your premiums are going up, 0:00:15.480 --> 0:00:17.239 tips on how to make sure you've got the right 0:00:17.280 --> 0:00:20.160 cover in place, and innovations that are happening in the 0:00:20.200 --> 0:00:21.000 insurance space. 0:00:21.800 --> 0:00:22.439 I'm Sonya. 0:00:22.600 --> 0:00:25.520 I'm the co CEO and co founder of shares E's, 0:00:25.920 --> 0:00:28.320 and today I'm joined by Andy Kohn, who's the co 0:00:28.360 --> 0:00:30.560 founder of our insurance partner COD. 0:00:31.000 --> 0:00:33.600 Investing involves the risk you might lose the money you 0:00:33.640 --> 0:00:36.919 start with. We recommend talking to a licensed financial advisor. 0:00:37.640 --> 0:00:41.479 We also recommend reading product disclosure documents before deciding to invest. 0:00:41.720 --> 0:00:44.080 Everything you're about to see and here is current at 0:00:44.120 --> 0:00:44.879 the time of recording. 0:00:44.960 --> 0:00:49.559 So well, for Mandy, tell us, car do you diferent insurance? 0:00:50.360 --> 0:00:53.559 Well, I did a degree in physics and maths, and 0:00:53.600 --> 0:00:55.880 then there are the holiday jobs that come out of that. 0:00:56.400 --> 0:00:58.440 But one that there is is the actual aerial training 0:00:58.480 --> 0:01:01.560 path and insurance. It's all about the maths and statistics 0:01:01.560 --> 0:01:04.520 of insurance. I also knew about that because my father 0:01:04.640 --> 0:01:08.280 was an actuary, and so that was the first job I. 0:01:08.319 --> 0:01:11.160 Got Yeah, exciting that you've followed, you know, and your 0:01:11.240 --> 0:01:16.319 dad sits there, so you started co Do you want 0:01:16.319 --> 0:01:17.280 to tell us a bit about that? 0:01:17.840 --> 0:01:19.800 Yeah, so do I suppose there was a bit that 0:01:20.000 --> 0:01:20.720 led up to it. 0:01:21.000 --> 0:01:23.920 My brother and I were working in Germany at the time. 0:01:24.200 --> 0:01:25.520 We got over there for a week. 0:01:26.080 --> 0:01:29.440 It ended up working for a digital insurance player, and 0:01:29.920 --> 0:01:32.440 while we were up there, we became really impressed with 0:01:32.640 --> 0:01:37.679 what the digital solution and insurance could mean. And so 0:01:37.800 --> 0:01:39.640 then when we moved back to New Zealand and we 0:01:39.959 --> 0:01:43.399 looked at the market and so we thought, generally a 0:01:43.440 --> 0:01:47.200 digital assurance proposition is a good thing globally and makes 0:01:47.240 --> 0:01:49.160 a lot of sense. And then in New Zealand, we 0:01:49.240 --> 0:01:52.360 quite like the fact that the market is dominated by 0:01:52.400 --> 0:01:55.640 two large players. A lot of people don't know, but 0:01:55.800 --> 0:01:58.160 most of the brands in New Zealand lead back to 0:01:58.240 --> 0:02:02.120 one of two large really had most companies they have 0:02:02.200 --> 0:02:05.120 about ninety percent market share in the lines that we operate. 0:02:05.480 --> 0:02:07.400 So we thought that the digital. 0:02:07.040 --> 0:02:09.240 Transition was something that was coming and it's going to 0:02:09.240 --> 0:02:12.080 be good for customers and a good opportunity. 0:02:12.120 --> 0:02:13.079 And then we also liked the. 0:02:13.040 --> 0:02:16.080 Market the namicing Yeah cool, Why did you think it 0:02:16.120 --> 0:02:17.480 was good for customers. 0:02:17.040 --> 0:02:18.840 Or what was it, gap me sol Yeah, yeah, absolutely, 0:02:18.840 --> 0:02:20.760 So I mean that all sounds a bit worriing for 0:02:20.800 --> 0:02:24.560 company has got. What it means for them is insurance 0:02:24.960 --> 0:02:27.120 is cheap, so we can bring the price down and 0:02:27.160 --> 0:02:30.480 also the service level can be better. So if you 0:02:30.520 --> 0:02:32.880 think about the price point, we aim to be sort 0:02:32.880 --> 0:02:35.560 of fight it's ten percent cheaper than our competitors. And 0:02:35.600 --> 0:02:38.040 then also on the service level, if you need to 0:02:38.120 --> 0:02:40.760 call us. Firstly, you probably don't need to because you 0:02:40.800 --> 0:02:42.600 can do it all online. But if you do it, 0:02:42.639 --> 0:02:44.799 we'll arts the phone in about thirty seconds compared to 0:02:44.800 --> 0:02:45.840 say thirty minutes. 0:02:46.240 --> 0:02:50.560 So les for about the assurance industry broadly, and so 0:02:50.639 --> 0:02:51.920 what's been happening lately? 0:02:52.840 --> 0:02:57.520 Yeah, so I suppose in subways not a lot. Assurance 0:02:57.600 --> 0:02:59.560 is the safe thing. It's been for hundreds of years. 0:03:00.080 --> 0:03:04.440 But then in New Zealand specificularly last. 0:03:04.320 --> 0:03:07.560 Year and the premiums went up a lot, and then 0:03:07.680 --> 0:03:10.480 car insurance, which is what we do and know really well. 0:03:10.800 --> 0:03:13.280 There were a few factors that played into that. One 0:03:13.320 --> 0:03:17.360 of them was there's quite a lot of inflation, so 0:03:17.520 --> 0:03:20.000 inflation was running really hot last year, and then car 0:03:20.000 --> 0:03:23.760 insurance inflation as a little bit more than background inflation. 0:03:23.919 --> 0:03:26.960 Plus then we had the floods in Auckland and we 0:03:27.040 --> 0:03:30.320 had the Cyclone Gabriel as well, So all of that 0:03:30.400 --> 0:03:33.280 happened all at once, and so car insurance prices went 0:03:33.360 --> 0:03:35.840 up by sever thirty percent or more any year, which 0:03:35.960 --> 0:03:40.120 was really quite unheard of. And then that's having causing 0:03:40.160 --> 0:03:42.920 some bigger discussions to happen about what that means for 0:03:43.560 --> 0:03:45.280 home insurance in the market. 0:03:45.440 --> 0:03:47.480 When you think about also at the same time, like 0:03:47.520 --> 0:03:51.120 the new technologies that are coming out around insurance, what 0:03:51.120 --> 0:03:52.520 do you see impacting the ad. 0:03:53.760 --> 0:03:58.160 Yeah, there are some technologies that can actually bring down 0:03:58.200 --> 0:04:00.560 the risk, and I think that's what we find most 0:04:00.600 --> 0:04:04.760 exciting is you know what's here's your expected claims cost, 0:04:05.240 --> 0:04:07.680 and then what can you do that is sort of 0:04:08.800 --> 0:04:12.960 brings that down in a cost effective manner. And so 0:04:13.080 --> 0:04:16.839 for home insurance that's relatively difficult. You just need homes 0:04:16.880 --> 0:04:18.799 to be built a little bit better or not necessarily 0:04:18.839 --> 0:04:22.960 in the floodplanes. And then for car insurance there were 0:04:22.960 --> 0:04:27.760 specific examples, say twyter aquads that were getting stolen and 0:04:27.839 --> 0:04:31.359 alarm and rate we looked at what it would cost 0:04:31.640 --> 0:04:34.280 to cover them without an immobilizer and it worked out 0:04:34.320 --> 0:04:35.159 to be about three. 0:04:34.960 --> 0:04:38.360 Grandy and which is just how what's the what are 0:04:38.400 --> 0:04:38.720 they worth? 0:04:38.800 --> 0:04:40.360 That be like six grand ten. 0:04:40.520 --> 0:04:41.080 Something like that? 0:04:41.080 --> 0:04:42.000 You just can't pay that. 0:04:42.560 --> 0:04:45.520 But then we ran a quick experiment with what is 0:04:45.640 --> 0:04:48.800 what about we only underwrite them within a mobilizer cost 0:04:48.839 --> 0:04:50.440 five or six hundred bucks to get one of those, 0:04:50.760 --> 0:04:52.640 and then the cost comes down to about twelve uncle 0:04:52.680 --> 0:04:55.440 bucks and so now it's completely endurable again and the 0:04:55.440 --> 0:04:58.040 whole thing works. So, you know, when we look at 0:04:58.080 --> 0:05:00.080 the market and how we can play in it, we 0:05:00.200 --> 0:05:03.480 really like these little innovative solutions where what's the problem 0:05:03.480 --> 0:05:06.719 that you're facing, how do you inject something relatively cost 0:05:06.760 --> 0:05:08.240 effective that brings down the risk? 0:05:09.160 --> 0:05:13.960 Why the Twitter aqua the easy to steal and people 0:05:14.040 --> 0:05:18.120 became aware that they're still So we partner to deliver 0:05:18.200 --> 0:05:22.280 a car insurance product to our customers. And so can 0:05:22.320 --> 0:05:24.520 you tell us like who needs car insurance? 0:05:25.360 --> 0:05:27.520 I can spoil us everyone with the car would be 0:05:27.600 --> 0:05:32.200 my hope. You know, there are some people who choose 0:05:32.200 --> 0:05:36.280 not to take insurance, but as someone who sells insurance 0:05:36.279 --> 0:05:38.240 on are really advocate for them. It could really helps 0:05:38.279 --> 0:05:40.960 people out. So yeah, really everyone with the car. 0:05:41.440 --> 0:05:42.839 Do you think it should be mandatory? 0:05:43.400 --> 0:05:44.800 I think it will be great if you could wave 0:05:44.800 --> 0:05:47.839 a wand and make everyone have it. But I think 0:05:49.200 --> 0:05:51.640 if making a mandatory means that there's a fine for 0:05:51.720 --> 0:05:53.640 not having it, then most of the people who don't 0:05:53.640 --> 0:05:56.040 pick it don't pick them because they can't afford it. 0:05:56.240 --> 0:05:59.200 And what you're saying is now someone who is still 0:05:59.240 --> 0:06:00.880 not going to happen sure it now gets a fine 0:06:01.600 --> 0:06:02.760 when they get caught not having it. 0:06:03.080 --> 0:06:04.000 I'm not sure really helps. 0:06:04.520 --> 0:06:06.320 Yeah, pair enought, so probably not really. 0:06:07.080 --> 0:06:11.920 Yeah, And what kind of cur insurance do people need? 0:06:12.680 --> 0:06:13.920 So what are the different kinds? 0:06:14.080 --> 0:06:14.279 Yeah? 0:06:14.560 --> 0:06:18.080 I suppose that the two big differences you could go 0:06:18.320 --> 0:06:20.680 third party or one of those experience or comprehensive. 0:06:21.560 --> 0:06:21.920 And so. 0:06:23.520 --> 0:06:26.799 I'm not a financial planner, don't have any special expertise there, 0:06:26.880 --> 0:06:29.080 but I would say that I see quite a lot 0:06:29.080 --> 0:06:32.039 of claims coming through, so I can definitely confirm that 0:06:32.080 --> 0:06:32.560 they happen. 0:06:32.760 --> 0:06:34.320 And if you've chosen something. 0:06:34.040 --> 0:06:37.080 Like third party fire and theft, you are exposing yourself 0:06:37.080 --> 0:06:40.680 to quite a bit of risk. About one in four, 0:06:40.720 --> 0:06:43.240 one and five who our customers will claim every year. 0:06:44.000 --> 0:06:47.039 And if you have third party only, you're unlikely to 0:06:47.080 --> 0:06:49.719 be able to claim for most of those reasons. So 0:06:49.800 --> 0:06:52.560 it definitely does happen, and it can be quite expensive, 0:06:52.600 --> 0:06:54.080 and it might happen more than you think. 0:06:54.279 --> 0:06:56.159 What are the most common claims that come. 0:06:56.080 --> 0:06:59.479 Through some most common is about half them's big wind screens, 0:06:59.640 --> 0:07:03.120 so just so we've got all those chipsy roads stones 0:07:03.160 --> 0:07:05.680 flick up at the windscreen in the sparhalf. And for 0:07:05.720 --> 0:07:10.640 the claims by number, the next biggest is collisions and 0:07:10.720 --> 0:07:14.400 so that's by dollars, the overwhelming majority of what we 0:07:14.480 --> 0:07:17.960 pay for. And then taking on down the list, you 0:07:18.040 --> 0:07:22.840 get for small things like lost keys stolen cars. People 0:07:22.920 --> 0:07:25.760 always think that's what insurance is for them, but less 0:07:25.800 --> 0:07:28.280 than five percent of our claims up for stolen cars. 0:07:28.680 --> 0:07:31.000 And the big risk is really that you're distracted and 0:07:31.040 --> 0:07:31.440 you ran. 0:07:31.360 --> 0:07:32.119 To the back of someone. 0:07:32.240 --> 0:07:35.520 So what your top three if people are looking. 0:07:36.720 --> 0:07:39.800 To change providers or reviewing their car insurance provider, like, 0:07:39.840 --> 0:07:42.120 one of the top three things that people should consider. 0:07:43.040 --> 0:07:45.600 I guess number one is are you with Global Shesi's. 0:07:47.160 --> 0:07:49.280 The number two would be what's the price? 0:07:49.800 --> 0:07:53.480 And then probably number three would be around what's actually 0:07:53.480 --> 0:07:56.160 covered and what's the service standard? And what are you 0:07:56.200 --> 0:07:59.680 paying for. For most people car insurance is going to 0:07:59.680 --> 0:08:02.200 act exactly how they expect. But if you're using it 0:08:02.240 --> 0:08:04.120 in an unusual way. You know, if you do a 0:08:04.120 --> 0:08:07.440 lot of offer a driving wet, if you are using 0:08:07.480 --> 0:08:10.600 a few business, if you've converted your car in something, 0:08:10.600 --> 0:08:13.480 if you've modified it, it pays to really understand how 0:08:13.480 --> 0:08:15.040 that's going to be true it sure? 0:08:15.680 --> 0:08:17.640 And how about how to think about excess? 0:08:17.920 --> 0:08:20.800 How I think about excess is what amount of money 0:08:20.840 --> 0:08:24.840 am I comfortable paying immediately at a pinch or something 0:08:24.920 --> 0:08:29.200 goes wrong, and then pick that right them out. If 0:08:29.200 --> 0:08:30.680 you can afford to pay a little bit more, you 0:08:30.720 --> 0:08:33.599 can say by fermiums. But if you're really going to 0:08:33.640 --> 0:08:36.520 struggle to scrape together five hundred bucks in hundred bucks 0:08:36.520 --> 0:08:38.600 wherever it is, then you might. 0:08:38.480 --> 0:08:40.079 Be better off in all the lords. 0:08:40.679 --> 0:08:43.640 And how about because I'm just thinking of the information 0:08:43.679 --> 0:08:46.240 that you put in when you are looking at getting 0:08:46.280 --> 0:08:48.480 a quote, or the information that you take before it, 0:08:48.520 --> 0:08:51.360 like that calculates the premium. One of the ones is 0:08:51.440 --> 0:08:53.880 car value or the value replacement value of the car. 0:08:54.320 --> 0:08:55.679 Sometimes that comes almost of the. 0:08:55.600 --> 0:08:59.080 Time it comes prepopulated with something you know, is there 0:08:59.080 --> 0:09:02.040 something that people should be doing or what should be 0:09:02.080 --> 0:09:02.920 in factory into that. 0:09:03.559 --> 0:09:06.240 Yeah, and maybe that's another thing that people can take 0:09:06.280 --> 0:09:08.960 as well as a market early or a greed value policy. 0:09:09.480 --> 0:09:13.280 We offer an agreed value policy just because we don't 0:09:13.360 --> 0:09:15.880 like the way that a market value policy operates. 0:09:16.120 --> 0:09:18.040 What's the difference between the tip So. 0:09:18.679 --> 0:09:21.280 If you write off your car with an agreed value policy, 0:09:21.320 --> 0:09:24.199 we pay out being mopped that you and should have ford. Yeah, 0:09:24.200 --> 0:09:26.000 but with the market value policy, it can be the 0:09:26.080 --> 0:09:28.800 less or what we think it's worth and then that 0:09:28.840 --> 0:09:32.040 you picked, which just becomes a little bit. 0:09:33.760 --> 0:09:37.320 So say, you know, how often should people be considering 0:09:37.320 --> 0:09:39.719 more reviewing their charage urns. 0:09:39.880 --> 0:09:42.080 As often as you like, because if you do cancel 0:09:42.200 --> 0:09:45.360 mid term, it sure as are obligated to give you 0:09:45.360 --> 0:09:46.959 your premium back or almost all of it. 0:09:48.040 --> 0:09:50.439 And so there's no real. 0:09:52.400 --> 0:09:55.360 Maximum to how regularly be shopping. But once a year 0:09:55.559 --> 0:09:58.360 sounds pretty good. You can send the annual renewal and 0:09:58.400 --> 0:09:59.240 it's a good time. 0:09:59.080 --> 0:09:59.679 To shop around. 0:10:00.080 --> 0:10:03.920 It's a different for everyone, right, and you know, depending 0:10:03.920 --> 0:10:05.800 on the type of car, things like that, But there's 0:10:05.840 --> 0:10:09.200 also factors like around age and gender and how they 0:10:09.240 --> 0:10:12.040 play in and so typically if you're under twenty five 0:10:12.080 --> 0:10:13.680 and your mail, your premiums are higher. 0:10:13.960 --> 0:10:15.520 Can you tell us a bit about that? And is 0:10:15.520 --> 0:10:16.120 that changing? 0:10:17.120 --> 0:10:19.880 Yeah, so I suppose the bad news is it's not 0:10:19.960 --> 0:10:25.079 changing creerly. And I suppose there's a few things that 0:10:25.160 --> 0:10:26.960 lead into it. And we do our pricing based on 0:10:27.960 --> 0:10:32.480 what are costs to actually pay for claims for those people, 0:10:33.000 --> 0:10:35.840 and so it costs a lot more to ensure you 0:10:35.880 --> 0:10:38.400 am a person because they crash more. And then there 0:10:38.400 --> 0:10:40.200 are a few factors that come into it. One is 0:10:40.280 --> 0:10:44.360 that they haven't been driving for as long. Another is 0:10:44.400 --> 0:10:48.240 that they're just younger and more prone to risky decision making. 0:10:49.720 --> 0:10:53.120 Another is that they have busy social lights and so 0:10:53.200 --> 0:10:56.360 they tend to be driving out late at night, maybe 0:10:56.400 --> 0:10:57.360 after a drink or two. 0:10:57.400 --> 0:10:59.960 Hope not too many, but all of them. 0:11:00.000 --> 0:11:02.840 That just increases your risk and increases the amount that 0:11:02.880 --> 0:11:05.679 we pay out. And not many of those things are 0:11:05.679 --> 0:11:09.720 really like to be a change. The one thing that 0:11:09.720 --> 0:11:13.560 could change is there are technologies out there for ensuring 0:11:13.679 --> 0:11:16.640 that we don't do some of the worst behaviors. So 0:11:16.840 --> 0:11:19.760 the worst things really is pulling out when there's not 0:11:19.840 --> 0:11:23.760 a big space, following people too close behind, and looking 0:11:23.760 --> 0:11:25.240 at your fine and you're supposed to be drunk it. 0:11:26.440 --> 0:11:30.880 And so there are technological solutions that either penalize you 0:11:30.960 --> 0:11:33.719 with your premiums if you do those things, or are 0:11:33.720 --> 0:11:37.199 conversely ruw warch you if you die, or they can 0:11:37.200 --> 0:11:39.480 prompt you when you're doing one of them and kind 0:11:39.520 --> 0:11:42.600 of intubate. So we have looked at those for kind 0:11:42.600 --> 0:11:46.040 off but the problem is the cost of the technology 0:11:46.360 --> 0:11:49.720 is quite high compared to what it saves in kinds cost. 0:11:50.320 --> 0:11:53.840 And yet also the services are quite sort of intrusive 0:11:53.880 --> 0:11:57.760 and annoying, and we just didn't think people would go 0:11:57.800 --> 0:12:02.359 for them. But then logited, as cars become more autonomous, 0:12:02.480 --> 0:12:04.440 this has to matter less or less who's in the 0:12:04.480 --> 0:12:05.080 driver's seat. 0:12:05.120 --> 0:12:07.880 So there is some good news avingually and. 0:12:07.840 --> 0:12:09.920 Probably the final point a is younger males are a 0:12:09.960 --> 0:12:13.760 little bit worse than younger non males, but not that 0:12:13.880 --> 0:12:17.920 much worse. So everybody still in that position in the 0:12:17.960 --> 0:12:18.480 younger group. 0:12:19.080 --> 0:12:21.160 So if we think about the future of insurance, like 0:12:21.200 --> 0:12:22.640 how does it need to change? 0:12:23.320 --> 0:12:27.200 I think there's becoming more of an awares of individual risk. 0:12:28.000 --> 0:12:31.040 And if you think back a long time, everyone paid 0:12:31.040 --> 0:12:32.920 more or less the same premium and then all the 0:12:33.000 --> 0:12:36.640 risks swept up and that's changing now. People in more 0:12:36.679 --> 0:12:39.880 earthquake prime cities are definitely seeing it. And we're talked 0:12:39.880 --> 0:12:43.240 a little about younger drivers and why they pay more premiums. 0:12:44.280 --> 0:12:47.080 And I think where insurers need to get better is 0:12:48.559 --> 0:12:51.200 displaying to people what these risk factors are. You know, 0:12:51.200 --> 0:12:52.920 we've done a lot of work to figure it all out, 0:12:53.600 --> 0:12:56.760 and we don't always share that with the consumers. I 0:12:56.760 --> 0:12:58.840 think if you think of an example where people are 0:12:58.840 --> 0:13:02.280 looking to buy a house, they're not geologists. They don't 0:13:02.320 --> 0:13:07.480 necessarily know what the what the risks are that they're facing, 0:13:08.240 --> 0:13:10.560 and we could quite readily tell them. So the government, 0:13:11.120 --> 0:13:13.000 I think the banks have a fairly good idea too, 0:13:13.280 --> 0:13:15.600 but making that or a much more visible part of 0:13:15.600 --> 0:13:18.120 the process is good. And then we talked about some 0:13:18.200 --> 0:13:20.360 of the things with driving in the ways that you 0:13:20.400 --> 0:13:25.000 can help people mitigate their risk with actuals as well. 0:13:25.080 --> 0:13:27.720 We gave people a good path to bringing down their 0:13:29.320 --> 0:13:32.520 their premiums by reducing the risks that they face. So 0:13:32.840 --> 0:13:35.320 I see that as the future of insurance. It's becoming 0:13:35.360 --> 0:13:38.760 kind of a risk partner that helps you before something happens, 0:13:38.840 --> 0:13:40.480 rather than me in the ambulance at the bottom of 0:13:40.520 --> 0:13:44.640 the cliff cleaning of the mess after it's already happened. 0:13:48.360 --> 0:13:49.000 Before we go. 0:13:49.200 --> 0:13:51.760 We've teamed up with Cove to offer car insurance for 0:13:51.880 --> 0:13:55.720 Chasis customers with discounted prices. You can check out more 0:13:55.760 --> 0:13:58.400 on our website or get a quote within the Chasis app. 0:13:59.000 --> 0:14:02.479 Thanks again to and for joining us and talking about insurance. 0:14:02.640 --> 0:14:03.360 Have a great week.