New Zealand’s non-life market ‘stable’, good premium growth is anticipated: AM Best

Volatile weather conditions, tightening reinsurance capacity, and reinsurance rate increases may increase volatility.

New Zealand’s non-life insurance segment is predicted to stay stable, anticipating solid premium growth driven by ongoing rate improvement, particularly in the property and motor segments, AM Best said.

Despite weather-related claims and high inflation, the primary non-life market in New Zealand has demonstrated resilience. 

“Earnings in 2023 are expected to be materially impacted by significant weather-related claims, owing to January’s Auckland Anniversary Weekend floods and February’s Cyclone Gabrielle,” Victoria Ohorodnyk, director and head of analytics for Southeast Asia, Australia and New Zealand, AM Best, said.

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However, factors such as volatile weather conditions, tightening reinsurance capacity, and reinsurance rate increases may increase volatility in primary insurers' earnings. 

The impact of significant weather-related claims, particularly from the Auckland Anniversary Weekend floods and Cyclone Gabrielle, is expected to affect earnings in 2023. 

Despite these challenges, positive trends in premium growth are anticipated, driven by record-high inflation and ongoing rate adjustments.