Tower follows AA Insurance's coronavirus lockdown profit pledge

Monday, 20 April 2020

Car accidents have fallen durign the coronavirus lockdown says Richard Harding, chief executive of Tower Insurance.

Tower Insurance has followed AA Insurance's pledge not to make a profit on car insurance resulting from a drop in car crash claims during lockdown.

Late last week AA Insurance froze premiums on house, car and contents insurance, and set up a $2 million hardship fund into which it could dip to assist policyholders struggling to pay premiums.

Now, Richard Harding, chief executive of Tower Insurance vowed the NZX-listed company would not profit from Covid-19, and would make premium refunds to its car insurance policyholders by the end of May.

IAG, which owned the State, NZI and AMI brands, also said it had no intention of deriving any benefit from the Covid-19 lockdown, and intended any benefits would flow back to its policyholders.

](https://www.stuff.co.nz/business/121063241/car-insurance-claims-have-crashed-during-lockdown-aa-insurance-says)* Pitfalls lie in wait for households seeking to trim insurance cover

'AA Insurance is experiencing a drop in the level of car insurance claims made during March and April, following the Covid-19 Level 4 restrictions which have meant New Zealanders are staying home and driving less,' says chief executive Chris Curtin.

* Insurers have 'pandemic insurance' in case virus deaths spike

* Giant health insurer Southern Cross allows people to put policies on hold**

'We know that people are driving less, and this is resulting in lower claims, so any savings we make will be passed back to our customers,' Harding said.

'There is still a whole lot of uncertainty at the moment and we have not processed refunds on this scale before, which is why we need some time to calculate and arrange them,' Harding said.

On Thursday, April 16, AA Insurance's chief executive Chris Curtin said AA Insurance was experiencing a drop in the level of car insurance claims made during March and April, following the Covid-19 Level 4 restrictions which have meant New Zealanders were staying home and driving less.

AA Insurance is majority-owned by Vero, which is in turn owned by Australian ASX sharemarket-listed Suncorp.

Suncorp launched a $2m hardship fund to support customers of Vero, and its New Zealand life insurance company Asteron.

Vero also gave car insurance policyholders the option of parking up their cars for a period of time, and cutting their premium to reflect the lower risk of a claim.

'We are continuing to monitor the impacts that Covid-19 is having across our business – we have a dedicated team working on our customer support measures during this crisis and this is a priority for us,' a statement issued by IAG said.

'It's our intention that any additional benefits arising from the Covid-19 lockdown and travel restrictions will ultimately flow through to our customers.'

'Our immediate focus has been supporting our vulnerable customers facing financial hardship, and as a consequence, we established a customer care team for this specific purpose on March 31.

'We have a range of measures already in place to support our customers who are experiencing financial hardship.'