According to the analysis firm’s New Zealand General Insurance – Key Trends and Opportunities to 2023 report, between 2014 and 2018, New Zealand’s general insurance market expanded by a compound annual growth rate (CAGR) of 10.3 per cent. As a percentage of the country’s total insurance industry, it grew from 76 per cent to 80.2 per cent over that period and is projected to comprise 81.4 per cent of the total market by 2023.
But what is driving this? Primarily, according to GlobalData, it’s New Zealand’s high susceptibility to natural hazards such as earthquakes, as well as an ongoing rise in construction, both residential and infrastructural.
“Investments in the construction of residential buildings drove growth in property insurance,” commented Tapas Bhowmik, Project Manager in GlobalData’s insurance division. “The government, through the KiwiBuild Program, plans to invest NZD2 billion (US$1.5 billion) during 2018–2020.”
In response to increasing numbers of natural catastrophe events – the Insurance Council of New Zealand reported insured losses of US$323.8 million due to these events between 2017 and 2018 – local insurers are adopting new risk models and price structures, as well as reviewing and evolving their underwriting practices. They are also adopting new technologies throughout the value chain, with the aim of improving efficiency; this, according to GlobalData, coupled with high levels of internet penetration in New Zealand, suggests that online product offerings are a key area that insurers should be focusing on.
“Insurers’ focus on digitisation to transform business processes and cater to evolving customer needs will propel the growth of general insurance business in New Zealand,” added Bhowmik.
The full report can be purchased here.