New Zealand Insurance Report Q3 2012
Business Monitor International, May 2012, Pages: 59
Business Monitor International's New Zealand Insurance Report provides industry professionals and strategists, corporate analysts, insurance associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on New Zealand's insurance industry.
The operating environment for New Zealand’s non-life insurance segment continues to evolve in the wake of the enormous natural disasters of 2011. A year ago, in the aftermath of the main Christchurch earthquake of February 22, 2011, a key challenge for the non-life insurers was access to reinsurance and processing claims. As of April 2012, the newsflow indicates that the processing of claims by the insurers, and the Earthquake Commission (EQC) has been going well. Meanwhile, it appears that the non-life insurers are – at worst – securing reinsurance cover on a year-to-year basis. Three months ago, we observed that the main problem appeared to be ‘a lack of confidence on the part of households and businesses which will likely hamper the growth of premiums over the next year or so’.
Now, a new challenge has emerged. The major non-life companies have been able to achieve a substantial increase in their rates in the wake of the various Christchurch earthquakes (the latest occurring on December 23 2011). Retention rates appear to have held up fairly well. However, it is not clear how fast the segment will grow given that the EQC has trebled its levies with effect from February 1 2012. It remains to be seen how businesses and households respond to a very substantial increase in insurance costs. Meanwhile, IAG has reinforced its dominant position in the New Zealand non-life market through its purchase of AMI. This transaction, which closed in early April 2012, will lift IAG’s market share to around 45%. Particular companies are growing through an expansion of their health insurance businesses. In the life segment, two main trends continue to stand out. First, premium growth 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. However, the latest data indicates that the pace of expansion is slowing, as almost all New Zealanders who are likely to sign up voluntarily have already done so. We believe life density will still be low by the standards of developed countries at the end of the forecast period
Executive Summary
Table: Total Premiums, 2008-2016
Key Insights And Key Risks
SWOT Analysis
New Zealand Insurance Industry SWOT
New Zealand Political SWOT
New Zealand Economic SWOT
New Zealand Business Environment SWOT
Life Sector
Developed States Life Sector Overview
Table: Developed States Life Premiums, 2008-2016 (US$mn)
New Zealand Life Sector Update
Life Industry Forecast Scenario
Table: Total Life Premiums, 2008-2016
Growth Drivers And Risk Management Projections
Population
Table: Insurance Key Drivers, Demographics, 2008-2016
Non-Life Sector
Developed States Non-Life Sector Overview
Table: Developed States Non-Life Premiums, 2008-2016 (US$mn)
New Zealand Non-Life Sector Update
Non-Life Industry Forecast Scenario
Table: Total Non-Life Premiums, 2008-2016
Growth Drivers And Risk Management Projections
Macroeconomic Outlook
Table: New Zealand Economic Activity, 2011-2016
Political Stability Outlook
Epidemiology
Table: Insurance Key Drivers, Disability-Adjusted Life Years, 2008-2016
Insurance Risk/Reward Ratings
Table: New Zealand’s Insurance Risk/Reward Ratings
Table: Developed States Insurance Risk/Reward Ratings
Competitive Landscape
Competitive Landscape Analysis
Major Players In New Zealand’s Insurance Sector
Table: Gross Written Premiums And Estimated Market Shares, June 30 2009-June 30 2010
Earthquake Commission
Accident Compensation Corporation
Health Funds
Other Asset Pools
Company Profiles
Local Company Profiles
AMI
Farmers Mutual Group
Regional Company Profiles
Allianz
AMP
Asteron
Chartis
IAG
Tower
Vero
Zurich
BMI Methodology
Insurance Risk/Reward Ratings
Table: Insurance Risk/Reward Indicators And Rationale
Table: Weighting Of Indicators
- AMI
- Farmers Mutual Group
- Allianz
- AMP
- Asteron
- Chartis
- IAG
- Tower
- Vero
- Zurich
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