Anecdotal evidence from industry professionals and new offerings from underwriting firms suggest that some global insurers and their investors are currently viewing New Zealand as a market opportunity. Brokers are likely seeing improvements in capacity and coverages across some lines, including directors and officers (D&O) and cyber.
This follows recent years of capacity reductions in the wake of nat cat pressures, particularly earthquakes.
“Cycles have always come and gone,” said Travis Atkinson (pictured above) at the recent New Zealand Underwriting Agencies Council (NZUAC) Expo in Auckland.
Atkinson is general manager of operations for Insurance Advisernet New Zealand. He said New Zealand is now an attractive market for London and other capital providers.
“We’ve just had a period of about two years where rates went up significantly and we’ve had no major [earthquake] perils,” said Atkinson. “So suddenly you get markets like London and other capital providers saying, ‘Let’s look at New Zealand, the rates are high and the margins are high’.”
Underwriter Ryan Clark’s experience on a recent business trip to Lloyd’s of London supports Atkinson’s view.
“In terms of the UK, we’re noticing a restored appetite for New Zealand risks after a few years (influenced by their own market pressures) of a more restrictive approach,” said Clark, executive director of Commercial for 360 Underwriting Solutions Group.
“This is enabling us to bring more bespoke solutions to New Zealand,” he said.
Clark said some underwriting offerings his firm is currently looking at for local brokers include agriculture and other primary industry offerings.
Last month, Australia-headquartered Agile Underwriting Services launched a new insurance division locally.
Agile Insurance Group NZ, according to the firm’s media release, will offer coverages across general aviation, accident and health, casualty and professional lines.
The launch followed Agile’s approval earlier this year to operate as a Lloyd’s syndicate in New Zealand and Australia.
“We see the New Zealand market as a critical element in our development,” said Mark Hunt, the syndicate’s lead underwriter. He said the offering brings brokers access to new capacity options “that reflect the region’s unique demands.”
In March, global brokerage Marsh released a New Zealand insurance market update. The report suggested ongoing challenges across the market in 2024 but also struck a relatively optimistic note.
In the property sector the report identified ongoing challenging conditions with “signs of improvement as we progress further into the year.”
“A key driver of the local market is the impact of two significant weather events in early 2023, with insured losses estimated to total $3.5 billion,” said the authors.
Construction market conditions also “remain challenging.”
However, the report said insurance conditions for New Zealand’s directors and officers (D&O) and cyber insurance offerings were “generally more positive as 2023 displayed increased stability and rate reductions for well-managed risks.”
This is in line with global D&O and cyber trends.
The marine insurance market, according to Marsh, “has shown signs of improvement as London-based insurers’ growth strategies are expected to drive market competition.”
“2023 was a standout year for Lloyd’s of London in respect of underwriting results, which we expect to have a positive impact on the local New Zealand insurance market,” said the report.
The Carrier Perspective: 2024 Claims Insights, found that more than 80% of insurance companies in New Zealand and Australia view compliance with data privacy and security regulations as a major hurdle.
However, according to global legal firm DLA Piper, recent modifications to the Contracts of Insurance Bill ahead of its approval later this year are good news for brokers.
“It [the Finance and Expenditure Committee] has recommended adding protection for intermediaries so that when a broker complies with their new obligation to pass information on to an insurer, they will not be liable for any breach of any contract or a civil wrong,” said Emma Moran, a partner with the firm in its Wellington office.
Are you a broker in New Zealand? What insurance challenges are you experiencing? Are you seeing capacity and offerings from insurers improve? Please tell us below
