Financial pressures are influencing insurance decisions among New Zealanders, with new research showing that one in five have changed insurance providers within the past two years.
A study commissioned by the Insurance Council of New Zealand Te Kāhui Inihua o Aotearoa (ICNZ) found that 20% of surveyed individuals had recently switched insurers, while 34% had done so at some point in the last five years. In contrast, 32% reported never having changed providers.
The survey also highlighted consumer behaviour around insurance renewals, with 21% saying they regularly shop around when renewing their coverage, compared to 25% who never explore alternative options.
ICNZ chief executive Kris Faafoi said the findings indicate that a significant portion of policyholders are not actively reviewing their insurance arrangements.
“The survey shows that a relatively low number of New Zealanders consider switching their insurance provider,” he said.
New research by Ipsos New Zealand suggested that financial strain remains prevalent among households. One in four New Zealanders reported difficulty meeting day-to-day expenses, a figure that has remained steady over the past two years but has risen six percentage points since 2022.
Lower-income groups have been disproportionately affected, with a 13-point increase in financial hardship since tracking began. Employment insecurity is also a major concern, with nearly half of survey participants expressing worries about job loss. Among those concerned about employment, over 80% said they had reduced their spending.
Inflation expectations remain largely negative. Despite growing anticipation that interest rates may fall over the next 12 months, more than half of New Zealanders expect inflation to continue rising. About 41% anticipate a reduction in disposable income, and only 22% believe their living standards will improve.
Faafoi emphasised the importance of assessing insurance needs and available options, given the ongoing financial pressures.
“We know this is a difficult time for New Zealanders dealing with the cost-of-living, and we would encourage people to check out their insurance options,” he said. “Insurance premiums have been affected by a number of factors, some of which are out of our control such as the rising cost of extreme weather events and taxes and levies. Some of those pressures are easing, and we are seeing that flow through into premium levels.”
Demographic trends in the survey showed that younger individuals were more likely to have switched providers, while older demographics were less inclined to do so.
Those living in Wellington and households earning between $50,000 and $100,000 annually were also more likely to have made a change in recent years.
More than 50% of insured individuals contacted their provider about their cover over the past two years, outside of filing claims, while 16% had no contact at all during that period.
Faafoi said insurers are offering support to help customers manage their insurance affordability, including adjustments to policy excesses or other settings.
“Insurers are looking at ways to help their customers manage their cover to protect themselves as cost effectively as possible and keep insurance affordable and assessable. That includes considering their excess levels or other policy settings. People should take the opportunity to contact their insurer and see what’s available,” he said.
The survey further revealed that 41% of respondents regularly review their policy wording when updating coverage, while 8% said they never do so.
Faafoi emphasised the importance of understanding policy details.
“We are encouraged by the number of people reading their policy wording, and we’d like to see that rise further. It’s important to know that you are adequately covered and also to know what is not included in your coverage. For example, most house insurance only covers sudden damage, not gradual damage,” he said.
