Stable Outlook on New Zealand Life Insurance Sparks Industry Reactions
- The outlook for New Zealand's life insurance segment has been deemed stable by AM Best due to strong capital adequacy and regulatory improvements.
- Life insurers are facing challenges like rising claims costs and subdued premium growth, prompting them to adopt strategic cost controls and enhance operational efficiencies.
- Continued investment in technology and insurtech is critical for addressing consumer demand and maintaining profitability in the evolving market.
AM Best has assigned a stable outlook for New Zealand's life insurance sector due to its strong capital adequacy and enhanced market discipline, attributed to regulatory improvements. These advancements have improved operational efficiencies through technology investments, though heightened compliance costs and cyber risks pose significant challenges. The financial performance of life insurers has faced pressure from increased claims costs and decreased premium revenues, leading to strategic changes to maintain profitability. The insurance industry in New Zealand is evolving, with a focus on digital solutions, underlining the growing importance of technology in meeting consumer needs. AM Best will provide further insights into the sector during its Insurance Market Briefing in Auckland in November 2024.