Two hundred thousand hectares of New Zealand commercial plantation forest have moved outside the insured fire pool over three years, the specialist market for forestry fire cover remains concentrated among a small number of providers, and an El Niño event forecast to peak over the 2026-27 summer is expected to increase drought and fire weather risks in parts of northern and eastern New Zealand. For insurance brokers with forestry or rural clients, the shift raises questions about coverage gaps, alternative risk options, and how advice around reduced availability is documented.
The coverage figures were reported by RNZ on August 3, 2026, drawing on a survey by the Forestry Owners Association (FOA) and Farm Forestry Association. Three years ago, 500,000 hectares of commercial plantation forest was insured against fire. That figure now stands at 300,000 hectares – a 40% contraction. Annual fire protection expenditure by large-scale forest owners has also fallen 27% since 2022, the survey found. Earth Sciences New Zealand (ESNZ) and the World Meteorological Organisation (WMO) have both warned that an El Niño event is developing, with a 95% chance of El Niño conditions forming over winter and peak conditions expected during the 2026-27 summer, bringing heightened risks of drought, heat, and wildfire.
New Zealand’s net stocked planted production forest covered an estimated 1.82 million hectares as at April 2025, with a total standing volume of 572 million cubic metres and an average forest age of 18.8 years, according to MPI’s National Exotic Forest Description 2025. Indicative log prices for the December 2025 quarter placed the weighted average export price for unpruned A-grade radiata pine logs at $135 per JAS cubic metre FOB, according to MPI’s Canopy platform – providing context on the economic value associated with the forestry asset base, although insured values for standing timber vary materially depending on factors including forest age, rotation stage, location, yield, and harvesting costs. The sector is New Zealand’s fourth-largest food and fibre export earner, generating $6.27 billion in export revenue in 2025.
Sean McBride, who chairs the fire committees of both associations, told RNZ the coverage decline reflects constrained market access as much as cost. “For a lot of forest owners, they struggled to be able to obtain insurance. So even if they wanted to, they couldn’t find a provider. For others, if they found a provider, it wasn’t financially viable for them, the costs that escalated too high,” McBride said. The active underwriting market for plantation forestry fire insurance in New Zealand is narrow. The FOA’s endorsed arrangement for members is Aon in partnership with Insurance Facilitators, which operates as underwriting agent for HDI Global Specialty SE – New Zealand, offering fire and wind cover for standing timber. ForestCover, managed by Sage Partners as Lloyd’s coverholder, is a further specialist provider. Gallagher also maintains a forestry book with stated access to international specialist underwriters.
Mainstream carriers have withdrawn from parts of the forestry insurance market as insurers reassessed their appetite for a class exposed to wildfire risk, claims volatility, and specialist underwriting requirements. NZI, QBE, and Vero have all reduced or exited forestry insurance capacity in recent years. The withdrawals have occurred despite the insurers continuing to operate across the broader New Zealand market: IAG, which owns NZI, reported a 50% increase in profit for the year ended June 30, 2025, while QBE reported 27% profit growth in its June 2025 half-year result. The developments highlight a class-specific underwriting challenge rather than a general withdrawal from the New Zealand market, with future participation likely to depend on pricing, risk assessment, and insurer appetite.
The Insurance Council of New Zealand (ICNZ) said the survey does not indicate cover is generally unavailable. “It appears a sizeable portion of smaller plantation forests continue to be insured, and that forestry insurance remains available in New Zealand. As natural hazard risks increase and costs rise, some asset owners may reassess the level of insurance cover they purchase,” it said, as reported by RNZ.
The survey’s fire protection data provides context for the underwriting environment. Annual fire protection expenditure by large-scale forest owners fell 27% since 2022. Fire team managers at forest companies dropped 20%, from 215 to 169. Trained personnel fell 11% to under 800 nationwide. The survey identified erosion of forest-specific fire management expertise within Fire and Emergency New Zealand’s (FENZ) first-response model as a central concern, tracing it to the 2017 restructure that folded rural fire authorities into FENZ. “Over the last nine years, we haven’t really seen a huge amount of development in the rural fire capability within the FENZ organisation, or forest owners for that matter as well,” McBride said.
The survey found FENZ is “relying heavily on deploying community-based volunteer firefighters to contain wildfires in the forest and rural landscape and has reduced or made minimal or inconsistent use of available partners’ expertise and capability.” United Fire Brigades’ Association of New Zealand chief executive Bill Butzbach told RNZ his organisation has been engaging with FENZ leadership directly on the coming season, noting “similar concerns to the other stakeholders in terms of our preparedness.” FENZ said it is reviewing training across urban and rural firefighting, with 824 non-FENZ personnel enrolled in wildfire training courses in 2024-25, including 264 from the forestry sector.
The Financial Markets Authority’s (FMA) Financial Conduct Report for 2026/27, released June 30, 2026, names financial advice as a priority sector with four cross-sector themes: managing remuneration conflicts, product design, complaints-handling, and fraud detection. Under the Financial Markets Conduct Act 2013, financial advice providers, including insurance brokers, must exercise care, diligence, and skill and ensure advice is suitable for the client’s circumstances. Where a forestry placement fails and that outcome is not documented and communicated, the gap between the advice given and the cover actually in place carries conduct risk under the current regulatory framework.
FENZ levy changes from July 1, 2026, mean the levy is now calculated on the full replacement sum insured rather than indemnity value for non-residential property, with no cap on commercial property levies, adding further cost pressure to an already constrained class. The ICNZ has separately proposed redirecting levy revenue toward natural hazard risk reduction – a proposal the government has not adopted but is reviewing.
For brokers, the figures provide a concrete basis for portfolio review. Two hundred thousand hectares of previously insured plantation have left the covered pool over three years, ahead of a forecast high-risk season. Whether that represents deliberate owner decisions, undocumented failed placements, or a combination of both is something brokers with forestry or rural clients are well-placed to establish – and, under current conduct obligations, have clear reason to do so on the record.
