New Zealand Insurance Update 2023

Insurers continue to face a higher-than-ever exposure to natural perils, such as floods and cyclones.

Reinsurance costs have increased significantly in the last few years, largely due to increased claims from weather-related catastrophes.

Insurers should evaluate whether their current technology platforms and architecture are fit for purpose and make changes to better align for future needs.

Reporting beyond financial metrics is common among New Zealand insurers – but the substance and level of detail of information about broader ESG matters reflect relative immaturity in the market.

With increasing claims and reinsurance costs, profitability is a challenge. This is one of the drivers behind a continued focus on simplification and automation across all aspects of the value chain.

Customers’ growing need for and perceived value of insurance is growing - they want to know exactly what they are paying for and how they can unlock their benefits without hassle, if things do go wrong.

A continued increase in cyberattacks - in particular those targeting personal data is heightening awareness of the cyber risks facing insurers.

We are seeing the importance of managing and getting value from data continue to increase. This is driven by three key trends: climate change, claims automation, and generative AI (i.e. ChatGPT). These trends are underpinned by an ongoing regulatory focus on data.

Significant investment has already been made by insurers to comply with IFRS 17. However, further investment will be required to successfully embed strategic solutions.

The steady stream of regulatory change the sector has seen recently is continuing and will do so for some time to come.