Not all companies to raise premiums

Press, Volume CXI, Issue 32707, 9 September 1971, Page 14

Not all companies to raise premiums

Proposed increases of 12j per cent in fire insurance premiums did not apply to nontariff companies, which were free to set their own premium rates, and did not fix prices by agreement, the general manager of the S.I.M.U. Mutual Insurance Association (Mr E. B. McKessar) said in Christchurch yesterday.

Referring to a Press Assor ciation report of criticism of the proposed increases by C.A.R.P., Mr McKessar said in a written statement that the public was somewhat confused about the constitution of the Council of Underwriters.

He also said that his company had no intention of increasing fire insurance premium rates "in the immediate future.”

The Council of Underwriters would more correctly be titled the Insurance Council of New Zealand, Mr McKessar said. This title had been adopted to replace the old title, the Council of Fire and Accident Underwriters’ Association. The companies making up this council were commonly known as the “tariff companies.” The statement by C.A.R.P. had said that “most of the major private insurance companies are members of this council,’ Mr McKessar said.

“In fact, there are many major private insurance companies operating in New Zealand which are not members of the insurance council, and these include such major companies as the S.I.M.U. Mutual Insurance Association in the South Island, and the N.I.M.U. Insurance Company in the North Island. “In the field of accident insurance in particular, the nontariff companies and the State Insurance Office are a major force, and in fact in

1970, 32.9 per cent of accident insurance income collectd by private insurers in New Zealand was collected by companies not affiliated to the insurance council, in other words, the non-tariff companies.

“Of this amount, more [than half was taken by the S.I.M.U. Mutual Insurance Association and our North Island counterpart, the N.I.M.U. Insurance Company.” The combined business of these two companies exceeded that of any other private insurer, Mr McKessar said. “In the field of fire insurance, the non-tariff companies are not so prominent, mainly because of the much later entry of the mutual companies into this field.”

But the proposed increase did not apply to the nontariff companies, he said.