2013-12-27 12:54:02 - Recently published research from Business Monitor International, "New Zealand Insurance Report Q1 2014", is now available at Fast Market Research
As of late 2013, the outlook for both of the major segments of New Zealand's insurance sector is uninspiring. The socialisation of risk through the EQC and the ACC is a key reason why insurance has been and will remain underdeveloped by most metrics. The economic environment is not particularly favourable, at a time that the life insurers (in particular) need to do more to educate consumers about the benefits of insurance. Nevertheless, the sector has clear strengths, and coped very well in the aftermath of the second (and main) earthquake in Christchurch two years ago. Many of the leading life insurance companies are benefiting from the expansion of the KiwiSaver system - even though the KiwiSaver products do not
include an insurance component.
Full Report Details at
- www.fastmr.com/prod/754611_new_zealand_insurance_report_q1_2014. ..
Key Insights And Key Risks
By most metrics, the insurance sector in New Zealand remains underdeveloped in late 2013. This is partly because of the socialisation of risk through the Earthquake Commission (EQC) and the Accident Compensation Corporation (ACC), in the non-life (property and casualty) and life segments respectively. The EQC demonstrated its effectiveness in the wake of the main Christchurch earthquake of February 22, 2011. The Accident Compensation Corporation has been actively introducing reforms and changes to resolve its long-term funding issues.
However, there are other challenges. These include a fairly sluggish economy, a general absence of consumer confidence and the maturity of many of the main non-life lines. Non-life companies have been able to pass on costs of higher reinsurance premiums to their customers. Overall, though, non-life premiums are growing at single-digit rates. There is no obvious catalyst for this to change.
In the life segment, two main trends continue to stand out. First, premium growth, as in the non-life segment, is sluggish. This may be because of the recent compression in real incomes. A more fundamental problem, which the Financial Services Council hopes to address, is that New Zealanders tend not to see the need for life insurance products and/or begrudge having to pay premiums. Second, the assets under management (AUM) of the KiwiSaver schemes have been growing rapidly. We believe life density will still be low by the standards of developed countries at the end of the forecast period.
Report Table of Contents:
BMI Industry View
- Table: Total Premiums, 2010-2017
- Business Environment
- Table: Life Premiums, 2010-2017
- Non Life
- Table: Total Non-Life Premiums, 2010-2017
Industry Risk Reward Ratings
- Developed States Insurance Risk/Reward Ratings
- Table: Developed States Insurance Risk/Reward Ratings
- New Zealand Insurance Risk/Reward Ratings
- Table: New Zealand's Insurance Risk/Reward Rating
- Life Sector Update
- Non Life Sector Update
Industry Trends And Developments
- Life Growth Drivers And Risk Management Projections
- Table: Insurance Key Drivers, Demographics, 2010-2017
- Non Life Growth Drivers And Risk Management Projections
- Macroeconomic Outlook
- Table: New Zealand - Economic Activity
- Political Stability Outlook
- Healthcare Insurance
- Table: Insurance Key Drivers, Disease Adjusted Life Years 2010-2017
- New Zealand Competitive Landscape
- Table: ACC Accounts
- AMP Limited
- Insurance Australia Group
- Suncorp Group
- Developed States Life Sector Overview
- Table: Developed States Life Premiums, 2010-2017
- Developed States Non-Life Sector Overview
- Table: Developed States Non-Life Premiums, 2010-2017 (US$mn)
- Table: New Zealand's Population By Age Group, 1990-2020 ('000)
- Table: New Zealand's Population By Age Group, 1990-2020 (% of total)
- Table: New Zealand's Key Population Ratios, 1990-2020
- Table: New Zealand's Rural And Urban Population, 1990-2020
- Industry Forecast Methodology
- Risk/Reward Rating Methodology
- Table: Insurance Risk/Reward Ratings Indicators
- Table: Weighting Of Indicators
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