What should we make of David Parker's soothing message to the insurance industry? Labour recently announced policy for a new state-owned insurance company (KiwiAssure) but now insurers are told that it'll be no real threat.
Parker had a semi-solid back-up story. The initiative was said to be aimed at bolstering the NZPost/KiwiBank group and helping to keep insurers on their toes, both of which sound like reasonable objectives.
A desire to get/keep the business community onside is the obvious reason for the messaging. This group has always had huge influence over governments (not just in NZ) because investment strikes are hard to stare down once the media join their advertisers in protest. Best to keep them sweet if possible.
As for the policy itself, I'd like to think that KiwiAssure would have an extra rationale: to learn about the industry. I say that because it is one of several critical financial sector industries that have diffuse and potentially weak oversight (payment systems is another).
As the franchise sector knows very well, a good way to keep tabs on an industry is to own one or two suppliers. That helps you understand normal practice, cost structures, margins etc. Armed with inside knowledge, franchisors can design contracts that are "better" from their perspective.
In the same way, a smart government/public service could potentially use information gleaned from KiwiAssure to design public policy towards insurance that is "better" for society. Somehow I doubt that this is part of the plan though!