Labour thinks that because they tag “Kiwi” on the front of everything that people will like their daft policies.
The latest daft idea is to create a Kiwi Insurance company to try and undercut all the other companies out there. Their rationale is incredibly flawed because ultimately any insurance company operating in New Zealand alone will have all their risk located in New Zealand….and still have to seek reinsurance offshore…and therefore the underlying costs may actually be more expensive for “KiwiAssure” than that of insurance companies whose risk is spread globally.
The basic premise of insurance is to spread risk…all Labour’s policy does is concentrate risk…and we all know what happened to AMI with the Christchurch earthquake…the provincial under-cutter of insurance fell over.
Labour’s problem is that they think that if something is state controlled it is somehow better…two words…Solid Energy.
Gerry Brownlee gets stuck into them with a few home truths.
Canterbury Earthquake Recovery Minister and Minister Responsible for the Earthquake Commission Gerry Brownlee says Labour’s policy of establishing a state-owned insurer is no different than its other half-formed ideas – it’s emotive, shows a hopeless grasp of economic realities, and raises questions Labour won’t be able to credibly answer.
“Labour might hate private insurance companies, but the reality is they’re paying for $20 billion of the Canterbury rebuild – twice New Zealand’s annual corporate tax take,” Mr Brownlee says.
“The fact of the matter is you can only undercut insurance competitors if you’re prepared to take greater risk. Read more »