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The insurance sector in New Zealand has posted a 7% increase in gross earned premiums over the year to September 2017, reaching $9.3 billion, whereas gross claims increased by 52% to just under $8.2 billion over the same period, new statistics from the Reserve Bank of New Zealand have revealed.
The report shows the non-life (general and health) insurance sector accounted for around 76% of total gross earned premiums and life insurance accounted for around 24%.
Additionally, total revenue (including investment income) decreased slightly by 2% to just under $8.2 billion during the period September 2016 to September 2017, while total expenses (including claims) increased 6% to $7.5 billion. Total profit after tax decreased by 41% to $532 million for the year ended September 2017.
The report suggests that increases in claims expenses associated with the November Kaikoura earthquake and a number of significant weather-related events in 2017 have reduced profit margins for a host of general insurers.
Moreover, total assets across all sectors were steady at around $21 billion in the year to September 2017. Industry net assets were $7.3 billion and the return on net assets for the industry was just below 8% over the reporting year.
RBNZ head of macro financial stability Bernard Hodgetts said the new statistics will help provide insights into the insurance industry’s financial performance and position in New Zealand.
The data, which includes financial performance and financial position aggregates for the industry, was collected through the Quarterly Insurer Survey (QIS).
The QIS covered 28 of 88 licensed insurers, which accounts for just under 90% of assets and premiums of the insurance industry as a whole. Insurance provided by government entities, such as the Accident Compensation Corporation (ACC) and the Earthquake Commission (EQC), are not included in these statistics.
“The release today of a new set of statistics is part of a multi-year initiative towards providing comprehensive data on the New Zealand insurance industry,” RBNZ statistics manager Steffi Schuster said. “The Reserve Bank plans to expand the range of available statistics over time.”
For example, she pointed to statistics reflecting all insurers and not just QIS respondents, and solvency statistics.
“We plan to publish the next release on June 28, which will include December 2017 data and any revisions that arise in this period to improve data quality,” she said.
