New Zealand general insurance industry to reach $9.6 billion by 2029, forecasts GlobalData

The New Zealand general insurance industry is projected to grow at a compound annual growth rate (CAGR) of 8.3% from NZD11.8 billion ($7.1 billion) in 2024 to NZD16.3 billion ($9.6 billion) in 2029, in terms of gross written premiums (GWP), according to GlobalData, a leading data and analytics company.

GlobalData’s latest report “New Zealand General Insurance Market Size and Trends by Line of Business, Distribution, Competitive Landscape and Forecast to 2029”, reveals that the country’s general insurance industry is expected to grow by 10.3% in 2025, driven by medical inflation and premium rate hikes in property and motor insurance lines, which are forecast to grow by 10.6 and 10.3%, respectively. Together, the two insurance lines are expected to contribute 74.7% of the general insurance GWP in 2025.

Swarup Kumar Sahoo, Senior Insurance Analyst at GlobalData, comments: "The growth of general insurance in New Zealand will be supported by a stable economic environment and regulatory reforms. The easing of inflation and growing private investment are expected to boost domestic demand and household consumption. Personal property insurance will continue to support the growth of general insurance due to the rising number of weather events. Additionally, the increase in construction costs and rising repair costs are expected to further increase the premium rates.”

Property insurance is the largest line of business and is expected to account for 42.3% of the general insurance GWP in 2025. The growth in property insurance is driven by increased construction costs and higher reinsurance costs as global reinsurers reevaluate New Zealand's risk profile. The introduction of the Natural Hazards Act in July 2024 has prompted insurers to reassess their risk management strategies, leading to potential adjustments in coverage options and premiums necessitated by the Act.

The increasing incidence of natural disasters during 2021-23 has increased claims and repair costs, which has driven up premiums. The loss ratio for property insurance rose from 69.1% in 2022 to 96.0% in 2024, reflecting the impact of these events and construction cost inflation. Despite fewer natural disasters in 2024, the threat of future events continues to pose a risk to insurers’ profitability.

Sahoo adds: “The trend towards risk-based pricing has further increased premiums for consumers. As climate-related claims surge, insurers face the challenge of balancing affordability with adequate protection while adapting to regulatory changes and evolving risk profiles. In the presence of these factors, property insurance GWP is expected to grow at a CAGR of 8.6% during 2025-29.”

Motor insurance is the second-largest line of business, with an estimated 32.4% share of the general insurance GWP in 2025. In addition to a decline in new vehicle sales in 2024, the motor insurance industry faces challenges such as inflationary pressures and supply chain disruptions. Insurers are responding by increasing premium rates to cover rising claims costs and recover from recent events like the Auckland Floods and Cyclone Gabrielle. Motor insurance is expected to grow at a CAGR of 8.0% during 2025-29.

Liability insurance is estimated to hold an 8.1% share of the general insurance GWP in 2025, with growth driven by compulsory insurance requirements and strong demand for liability insurance of directors and officers. The segment is expected to record a CAGR of 6.6% over 2025-29, supported by growing awareness of cyber risks and regulatory compliance requirements. Insurers are focusing on robust cyber risk management procedures, scrutinizing organizations' cybersecurity infrastructure, and enhancing data protection measures.

Other general insurance lines are estimated to account for the remaining 17% share of the general insurance GWP in 2025.

Sahoo concludes: "The New Zealand general insurance market is expected to continue its strong growth trajectory, supported by regulatory reforms, perceived high nat-cat risk, technological advancements, and a stable economic environment. Insurers are likely to leverage insurtech solutions to streamline operations and enhance customer experiences. However, challenges such as natural disasters and geopolitical uncertainties remain key risks that could impact the market's outlook in the next two to three years."