Data and analytics company GlobalData’s latest report predicts major growth in New Zealand’s general insurance market in 2023, which could be driven by the country’s high susceptibility to natural disasters along with a rise in residential and infrastructure construction.
The firm’s “New Zealand General Insurance – Key Trends and Opportunities to 2023” report predicts that the general insurance market in the country will jump from 8.4 billion in 2018 to 10.9 billion in 2023.
It added that general insurance is now the major contributor of growth for the insurance industry as it grew from 76.0% in 2014 to 80.2% in 2018, with an expectation that it will reach 81.4% in 2023.
The report revealed that the gross written premium in the country’s general insurance market has registered a compound annual growth rate of 10.3% from 2014 to 2018 – which was mainly driven by property, motor, and personal accident and health insurance, as they collectively account for 91.8% of the share in 2018 . Property insurance was the largest contributor, with a 42.2% share of GWP.
“Investments in the construction of residential buildings drove growth in property insurance. The government, through the KiwiBuild Program, plans to invest NZ$2.0 billion during 2018 to 2020,” said Tapas Bhowmik, project manager in the insurance division at GlobalData.
Additionally, natural disasters are still considered a key risk factor – prompting insurers to replace conventional products with risk-based pricing models for underwriting as well as reviewing existing underwriting process for high-risk areas. Insurers have also focused on digitization for efficiency, with some using artificial intelligence (AI) to help them with their processes.
“Insurers’ focus on digitalization to transform business processes and cater to evolving customer needs will propel the growth of general insurance business in New Zealand,” Bhowmik concluded.
