Consumer NZ says people should reconsider doing all their business with a single insurance company, with multi-policy discounts now even harder to come by.

Tower - the country’s third largest insurer - has stopped offering the discounts to all new and renewing customers in the past week, following similar recent moves by AMI, State Insurance, AA Insurance and Vero.

Previously, customers with two eligible policies could save up to 10% off their premium and customers with three or more eligible policies could save up to 20%.

Consumer NZ Investigative Team Lead Rebecca Styles said the advocacy group was disappointed the discounts were no longer available as insurers moved to more personalised pricing.

“Multi policy discounts were one way policyholders could reduce costs. With the discounts gone, there’s even less reason to be loyal to an insurer for all your policies.”

Styles said with house insurance prices being determined by risks at individual properties, the difference in cost of house and contents premiums between insurers would now depend on their appetite for risk.

“Nevertheless, we always encourage policyholders to shop around by looking at our house and contents buying guide and comparison tool.”

In December Tower was fined $7 million for misleading customers in invoices about its multi-policy discount offer, after already repaying over $11.7 million to customers.

About 61,000 customers were affected - roughly 11% of Tower’s total customer base.

It announced its plans to phase out the discounts in a statement on the NZX in July last year but hadn’t given a specific date on when the change would take effect.

Chief Executive Paul Johnson said the company remains committed to providing fair, transparent and competitive pricing, and would continue to review its pricing.

“Tower has made significant investments to upgrade its systems and processes, with the aim of ensuring all eligible customers receive their appropriate multi-policy discount.”

Johnson said despite making substantial improvements, the complexity of accurately assessing the multi-policy discount meant there was still a risk of error.

“This level of risk falls short of the high standards Tower has set for delivering excellent customer experiences and is unacceptable for meeting regulatory requirements.”

IAG - which owns AMI and State Insurance - told the Herald last year that customer needs evolved over time, and said it was changing its pricing to ensure all customers were getting a fair, low price, regardless of how many different policies a person had.

“Our car, home, contents, and landlord’s policies are flexible and give customers more choice when it comes to their cover to better suit their individual circumstances. This approach also makes insurance easier for our customers to manage and understand.”

Suncorp - which owns Vero and operates AA Insurance as a joint venture with AA - said it had phased out multi-policy discounts on all policies, including those provided through commercial partners.

“This move is part of our focus on pricing and product simplification and will bring our policies into alignment with others in the market, several of which have already removed multi-policy discounts.”

Justin Lim, the chief executive of insurance comparison website Quashed, said households needed to be mindful of the move away from multi-policy discounts when choosing insurance policies.

“For consumers who are used to having that benefit of the multi-policy discount, it’s a really good time to look at that.”

Michael Sergel is Newstalk ZB’s business reporter, covering the daily life of business and the business of daily life. He’s been covering business, politics, local government and consumer affairs for over a decade.