Just over 50% of New Zealanders surveyed agreed or strongly agreed that it is important to have the right amount of insurance to cover the impact of potential risk events, according to research commissioned by the Financial Services Council (FSC).
However, 13% disagreed and strongly disagreed that having the right amount of insurance is important, half of which reported that they believed in ‘self-insuring’ rather than through an insurance provider.
The research findings are set out in a report entitled "Risking Everything: Insight into How New Zealanders Manage Risk". The survey covered 2,061 New Zealanders aged 18 or more.
The research shows that 60% of respondents with household incomes over NZ$100,000 ($65,880) per year were more likely to agree that having the right amount of insurance cover was important to them to cover these potential impacts, compared with 54% of the total.
Respondents with an insurance policy were asked to indicate their attitudes to paying for risk insurance. Over 70% felt that life insurance was a small price to pay and 66% said that although it might be seen as costing quite a lot if things go wrong, they will be protected.
Other findings include:
- The majority of those surveyed said that they had undertaken an activity in the past two-years to assess financial risk. Of those that had undertaken an activity to assess financial risk, the most common response was that the assessment had been taken when considering their property - car insurance, the cost of replacing home contents and the replacement cost of their home. Only 20% said that they had considered a risk of lost income due to illness or serious injury.
- Two-thirds of those surveyed thought that there was a moderate to high risk of major financial problems should a significant event happen such as serious injury or being unable to work. Many respondents said that they did not have enough savings in place to manage their financial commitments should they experience a short-term loss of income, and only half of those respondents saw the need for adequate insurance cover to mitigate those risks.
- Considering the number of respondents that reported they had thought about risk and undertaken an activity to assess a risk, the research indicates that many New Zealanders do not appear to be actively mitigating the risks of a potential significant life event which could have a major impact on their day-to-day lives.
The FSC says that the life insurance industry will use this research to continue to improve and deliver the best possible outcomes to support New Zealander’s in growing and protecting their wealth.
The FSC, a non-profit member organisation, is the voice of the financial services sector in New Zealand. Its 35 members comprise 95% of the life insurance market in New Zealand.