Fifth major insurance company discontinues multi-policy discounts

Consumer NZ is advising people to rethink consolidating all their insurance policies with one provider since multi-policy discounts are becoming increasingly rare. Tower, the third-largest insurer in New Zealand, recently joined the ranks of insurers like AMI, State Insurance, AA Insurance, and Vero in discontinuing multi-policy discounts for new and renewing customers. Before this change, customers could save up to 10% on premiums with two eligible policies and up to 20% with three or more.
Rebecca Styles, the lead investigator at Consumer NZ, expressed disappointment over the disappearance of multi-policy discounts. She highlighted that these discounts were a valuable way for policyholders to lower costs and emphasized the importance of not feeling obligated to stay loyal to one insurer for all policies now that these discounts are no longer available.
With house insurance premiums being based on the risks associated with individual properties, the variation in costs between insurers will depend on their risk appetite. Despite this shift in the market, Consumer NZ recommends that policyholders compare different insurers by utilizing their house and contents buying guide and comparison tool.
Tower faced a fine of $7 million for misleading customers about their multi-policy discount offer in invoices, resulting in over $11.7 million in repayments to affected customers, totaling around 61,000 individuals. The company notified the NZX of its intention to phase out these discounts in July without specifying an exact date for the change to take effect. Tower’s CEO, Paul Johnson, reiterated the company’s commitment to providing fair, transparent, and competitive pricing, promising ongoing reviews of pricing structures.
IAG, which includes AMI and State Insurance, acknowledged the evolving needs of customers and adjusted its pricing strategy to ensure fair pricing regardless of the number of policies held. Similarly, Suncorp phased out multi-policy discounts on all policies to streamline pricing and align with market standards. Justin Lim, the CEO of Quashed, advised households to be mindful of the shift away from multi-policy discounts when selecting insurance policies.
In conclusion, the landscape of insurance policy discounts is changing, and customers should carefully consider their options to ensure they are getting the best value for their coverage. Shopping around and comparing different insurance providers is crucial in the current environment, where multi-policy discounts are scarce, and personalized pricing models are gaining prevalence.