{"id":119260,"date":"2025-11-05T12:41:18","date_gmt":"2025-11-05T12:41:18","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/119260\/"},"modified":"2025-11-05T12:41:18","modified_gmt":"2025-11-05T12:41:18","slug":"insurance-affordability-challenges-continue-to-grow-rbnz","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/119260\/","title":{"rendered":"Insurance \u2018affordability challenges continue to grow\u2019 – RBNZ"},"content":{"rendered":"

The Reserve Bank<\/a> says growth in general insurance costs, especially property and contents insurance, has been slowing over the past six months but \u201caffordability challenges continue to grow\u201d.<\/p>\n

This comes as the Reserve Bank (RBNZ) released its latest six-monthly Financial Stability Report<\/a> on Wednesday.<\/p>\n

In the report, the RBNZ says this slowing of growth \u201creflects relatively benign weather, with no catastrophes approaching the scale of the 2023 flooding and cyclone events”.\u00a0<\/p>\n

“This has resulted in lower aggregate claims volumes than the average levels observed over the past five years.”<\/p>\n

\u201cHowever, inflation in general insurance premiums remains above consumer price inflation,” the RBNZ says.<\/p>\n

With the Government looking to potentially increase the National Hazards Insurance Levy<\/a> (homeowners pay this as part of their insurance premium), the RBNZ says an increase would place \u201cadditional upward pressure on insurance premiums\u201d.<\/p>\n

The money from the levy goes into the Natural Hazard Fund and is used to cover claims after a natural hazard event. The fund is also used to buy reinsurance from international financial markets, meet the costs of administering the Natural Hazards Commission (NHC) Scheme and goes towards research and education.<\/p>\n

Alongside this, the RBNZ says in the report that insurers have continued to adopt more risk-based pricing when it comes to house insurance.<\/p>\n

\u201cRising premiums are gradually becoming less affordable for policyholders.\u201d<\/p>\n

But \u201ca stronger supply of capital in global reinsurance markets has helped to limit reinsurance costs for New Zealand insurers. This development highlights the key role of global reinsurance markets in mitigating our exposure to natural disasters\u201d, the RBNZ says.<\/p>\n

\u201cMore favourable conditions in global reinsurance markets have contributed to this moderation.”<\/p>\n

Reinsurance is insurance for insurers and the RBNZ says New Zealand insurers\u2019 access to the global reinsurance market is a key contributor to financial stability.\u00a0<\/p>\n

Growth in health insurance premiums is accelerating<\/p>\n

Health insurance premiums have increased 19.2% in the past year<\/a> with the RBNZ saying health insurers<\/a> have been facing \u201cpressure from increasing claims costs\u201d.<\/p>\n

\u201cDeferred medical procedures following the Covid-19 pandemic and the stretched capacity of the public health system have contributed to a shift towards the private health system.\u201d<\/p>\n

On the ground<\/p>\n

General insurance for the average household has been at moderate increasing levels this September quarter, Quashed chief executive Justin Lim says.<\/p>\n

Quashed is an insurance comparison website<\/a> that lets people upload their insurance policy documents so they can easily read about detailed information on their plans, costs and renewal dates. Over 90,000 people have used the platform. The website also has a comparison tool which analyses and compares different policy options.<\/p>\n

Insurance data from Quashed\u2019s 2025 third quarter (Q3) report shows general insurance – Quashed considers this one house, one contents and one comprehensive car insurance policy – has increased 2% compared to last year\u2019s third quarter. This means average general insurance premium saw a rise\u00a0to $4966 from $4892.<\/p>\n

Lim says this is off the back of massive increases over the last three years. \u201cIt\u2019s good to see in the current climate that premiums are not climbing as quickly this year.\u201d<\/p>\n

While contents insurance has seen an annual increase of 3% – going from $844 to $868, the average contents insurance sum insured amount jumped 20% compared to a year ago.<\/p>\n

Quashed says the biggest jump was observed by those under the age of 30.<\/p>\n

Regionally<\/p>\n

Lim says people are getting hit differently depending on where they\u2019re based.<\/p>\n

Canterbury continues to see increasing house insurance premiums, compared to Wellington and Auckland.<\/p>\n

Canterbury\u2019s average house insurance premium went from $2655 to $3000 – an 8% increase year-on-year.<\/p>\n

Wellington saw a 2% year-on-year increase, with the average home insurance premium going from $4467 to $4559, while Auckland saw very small year-on-year change, going from $2104 to $2121.<\/p>\n

As for the average contents insurance premiums in Wellington, there was an 8% increase year-on-year, going from $1054 to $1134. Auckland fell 3%, from $755 to $731.<\/p>\n

In Canterbury, average contents insurance premiums increased 2% year-on-year, moving from $865 to $886.<\/p>\n

For average general insurance premiums, Canterbury saw a 5% increase year-on-year, from $4774 to $5022.\u00a0<\/p>\n

Meanwhile Auckland saw a 3% decrease year-on-year, going from $4438 to $4307.\u00a0<\/p>\n

Wellington saw a 1% year-on-year increase when it came to average general insurance premiums – moving from $6714 to $6785.<\/p>\n

Car insurance<\/p>\n

When it came to comprehensive car insurance premiums, all three regions saw a year-on-year decrease.<\/p>\n

Wellington and Auckland both had an 8% year-on-year decrease with Wellington going from $1193 to $1092 while Auckland dropped from $1579 to $1455.<\/p>\n

Canterbury saw a 9% year-on-year fall, moving from $1254 to $1136.<\/p>\n

\u201c[On average] car insurance premiums as far as we can see dipped 9% so that\u2019s good news for consumers but on the other side of that, if you\u2019re not actively shopping your policies we are noting that premiums are still increasing at roughly about 3% on average for the year ahead.\u201d<\/p>\n

Lim says there\u2019s two sides there – if you roll over your insurance, you can expect to pay 3% more. \u201cBut when we look at people that are actively shopping and comparing, there\u2019s actually significant savings to be found.\u201d<\/p>\n

Competition is heating up when it comes to car insurance which is good for consumers, Lim says, and he urges people to make the most of it.<\/p>\n

People who used Quashed found cheaper car insurance 80% of the time and on average could save $362.<\/p>\n

Users also saved with cheaper contents insurance 78% of the time and cheaper house insurance 61% of the time.<\/p>\n

When it comes to risk-based pricing from insurers, Lim says it\u2019s still early but through Quashed data, he says they are seeing variance coming through for different regions and different risks.<\/p>\n

\u201cFor a consumer – depending on the insurer\u2019s risk appetite at that point in time for that particular risk – they\u2019re going to see increasingly going forward, the variance in pricing.<\/p>\n

“Their premiums are going to be increasingly different across insurers.\u201d<\/p>\n

\u201cFor consumers, it really does pay to go and look around,” Lim says.<\/p>\n

Quashed has 12 insurers on its platform for comparison. Turners Automotive Group has a 13% stake in Quashed after investing $1 million. \u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"The Reserve Bank says growth in general insurance costs, especially property and contents insurance, has been slowing over…\n","protected":false},"author":2,"featured_media":119261,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":["post-119260","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/119260","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=119260"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/119260\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/119261"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=119260"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=119260"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=119260"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}