Mood of the Boardroom: Barfoot & Thompson’s Peter Thompson says rising insurance cost ‘eats into business profits’

Peter Thompson, managing director of real estate agency Barfoot & Thompson. Photo / Ted Baghurst

Rising insurance premiums are a big concern to Barfoot & Thompson managing director Peter Thompson.

The agency carries substantial insurance policies worth millions of dollars for cover on its many buildings that are agency outlets and support centres, vehicles used by property managers running the rental portfolio business, as well as professional indemnity policies.

“The increase in insurance premiums has been massive. It is another cost rise that eats into business profits and some small businesses simply can’t afford this and reluctantly don’t take it up, opening them to major issues if something goes wrong,” he says.

Last January’s Auckland and Hawkes Bay floods showed how many people retained insurance.

Personal insurance premiums were rising too, he noted.

“I can understand insurance companies’ positions with the number of disasters. But many of our insurers are overseas owned, a bit like the banks. This is one of many costs which have risen which I’m worried about,” he said.

International cyberattacks were another concern, he said.

“With the offshore scams, businesses can be attacked anytime and again, do you take out cyber insurance? It’s another big expense. It’s a real risk that many companies have to work around these days,” he said.

Future pandemics were another concern following Covid. He wonders about other possible threats to our health and whether this will be on a national or global level.

Thompson said the agency had introduced three new IT platforms, working on these during the past three years. That had resulted in more efficiencies and systems that gave more up-to-date information to run the company, he said.

“We’ve put a whole new finance system in, able to give us better and faster results for our managers and sales. Second, we’ve put in two new CRM Software systems to store customers’ details on. We’re trying to provide a better service to our vendors and purchasers.”

On a more national level, Thompson said the top three issues facing New Zealand were:

1. Cost of living: “Reduce or simplify some of the unnecessary policies that have been introduced over the past six years that have made cost of living escalate. Rising costs had put many businesses under,” Thompson said;
2. High interest rates: “It’s pleasing to see rates beginning to decline and I expect another two cuts before Christmas. We’ve got to ensure interest rates don’t go back to the extremely low levels they were at earlier this decade. If we can get to 2-3%, that’s where it should remain”;
3. Traffic congestion: “Most countries have tolls on motorways and their roads are in superb condition. As long as there is another route for people to take without paying tolls, to give people an option, the sooner we introduce this the better and we can help ease our transport issues.”

Thompson wants a relaxation of immigration rules.

“This would not only improve relationships with China, but many other countries from around the world, and give us greater opportunities to look into their markets as well as our own,” he said.

Connections between the North and South islands are of great concern to him.

“We need inter-island ferries and ones that don’t break down. Get one new one under way and once that is launched then get another under way, but they need to review these more regularly so as not to get in the same positions we are in today. Blame has to be with all governments of the past 10-15 years on this topic not keeping KiwiRail to account. It is not the current KiwiRail board where the issue sits — it is the previous ones.

“Anything to clean up the crime that many young people are committing. Getting work habits into them may give them a better life at the end of the day and a sense of achievement when they come out of it.”

Barfoot & Thompson is a sponsor of the Herald’s Mood of the Boardroom project

Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.