Foreign ministry advisory reversal puts NZ travel insurers back under conflict exclusion spotlight

New Zealand travel insurers are facing renewed questions over conflict exclusions after the Ministry of Foreign Affairs and Trade (MFAT) reversed a recent easing of travel advice for several Gulf destinations.

MFAT lifted the United Arab Emirates (UAE), Qatar, Bahrain, Kuwait, and Oman back to level 2 in June following a brief de-escalation in regional tensions. However, the advisory was raised again to level 3 on 20 July, advising New Zealanders to avoid non-essential travel.

The reversal has implications for travellers who booked or reinstated policies during the lower-risk period. Once destinations return to higher advisory levels, war and conflict exclusions may again become central to claims decisions.

The issue is significant for New Zealand’s outbound market, with Gulf hubs including Dubai, Doha, and Abu Dhabi serving as major transit points for travellers heading to Europe and beyond.

Southern Cross Travel Insurance (SCTI) reported 51 Middle East-related claims between 28 February and 28 June 2026, with its war and violence exclusion applied to all or part of each claim, according to Stuff. The total number of affected claims across the market has not been disclosed.

Conflict exclusions remain standard across New Zealand travel insurance providers, with insurers citing the difficulty of pricing unpredictable geopolitical risks.

The shifting advisory environment also raises conduct questions under New Zealand’s CoFI regime for financial institutions, particularly around customer communication, disclosure, and claims handling.

IATA recently reported a 3.4% fall in air passenger demand, largely due to the ongoing conflict in the Middle East between the US/Israel and Iran.