AA Insurance collected more than $1 billion in premiums in the year to June 30, 2026, but net profit after tax fell about 15% as claims and insurance service expenses rose sharply, according to financial statements published by the Companies Office.
Net profit after tax was $144.1 million, down from $170.2 million a year earlier. Premium revenue was $1.01 billion, up 1.8%, or $18 million. Claims and other insurance service expenses rose 7.9%, or $50.7 million, to $698 million from $647.3 million. The report did not specify which categories drove the increase. Net investment income fell 48%, or $18.2 million, to $19.2 million. The insurer nonetheless raised its annual dividend payout by $30 million to $160 million.
The most significant structural move in the period came on reinsurance. AA Insurance entered a multi-year aggregate excess of loss reinsurance contract on June 30. The contract covers five years and protects against the accumulation of natural peril losses over that period - a design that guards against the kind of repeated moderate event seasons New Zealand has experienced in recent years without a single catastrophic trigger to activate conventional cover.
Reinsurance premiums paid fell to $76 million from $107.4 million the year before, reflecting the new structure’s terms.
AA Insurance is a joint venture between the New Zealand Automobile Association (NZAA) and Vero Insurance, with Vero holding 68% and NZAA 32%. Vero is owned by Suncorp. The insurer provides home, contents, car and commercial small business cover, serving more than 560,000 customers across more than 1.1 million policies.
AA Insurance’s parent reported a harder year at the group level. Suncorp New Zealand announced a net profit after tax of $316 million for the 12 months to June 30, 2026. Chief executive Jimmy Higgins said the result reflected an increasing trend of more extreme and frequent weather events. Suncorp New Zealand reported gross written premiums of NZ$2.756 billion, down 4.8%, as commercial rate softening and book exits outweighed 3.2% growth in direct consumer lines. Higgins said natural hazard claims ran above Vero’s annual allowance after a series of major storms. The Suncorp group also entered a multi-year aggregate reinsurance cover on June 30 - the same date as AA Insurance’s own structure, suggesting a coordinated approach to natural hazard exposure across the group.
AA Insurance’s falling profit on rising premiums reflects a pattern visible across the New Zealand personal lines market: premium increases are not keeping pace with claims cost growth, and reinsurance structures are being redesigned around frequency rather than severity. The new five-year aggregate structure is the most meaningful signal in the results. It tells brokers that AA Insurance expects natural hazard losses to remain elevated and has locked in multi-year protection accordingly - a design choice that should provide greater pricing stability than year-on-year reinsurance purchasing, but that also reflects an underlying loss environment that the insurer does not expect to improve quickly.
For brokers with home, contents and motor clients, the Quashed comparison provides useful context: the average house insurance premium in New Zealand was $2,949 a year in the September 2026 quarter, up 2% year-on-year. That modest annual increase sits alongside the claims cost pressures visible in AA Insurance’s results, and it suggests further premium movement remains likely as the market absorbs ongoing hazard costs.
