New Zealand’s life insurance sector faces a structural demand challenge that converging research now puts in sharper focus: the two generations that have historically driven retail insurance uptake are delaying the life milestones that most reliably trigger it – and the youngest of those cohorts is also the least equipped to navigate the market when they do engage.
Deloitte’s 2026 Global Gen Z and Millennial Survey, released July 8 and drawing on 501 New Zealand responses, found that 64% of Gen Zs and 67% of millennials in New Zealand have delayed major life decisions due to their financial situation – above the global averages of 55% and 52% respectively. Those decisions – buying a home, starting a family, making career transitions – are the same events that have long anchored term life, mortgage protection, and income protection sales.
The Financial Services Council of New Zealand’s (FSC) own industry data shows the tension in hard numbers. As of June 30, 2025, there were 4.24 million life insurance covers across New Zealand against an estimated population of 5.34 million, with annual premiums of $3.23 billion. By March 31, 2026, premiums had risen to $3.31 billion – up 2.7% year-on-year – even as cover numbers continued to fall across several key products, according to FSC data.
That pattern – rising premiums, falling cover counts – points to a market extracting more value from existing policyholders rather than broadening access to younger cohorts. The FSC’s Money & You: Managing Risk Through Challenging Times report (November 2024) puts an uptake figure on it: just 41% of New Zealand respondents said they currently hold life insurance, and 39% hold health insurance. Income protection cover was even lower, with only 19% of respondents holding it and 23% holding trauma or critical illness insurance.
FSC chief executive Kirk Hope said the pattern is a known structural problem. “New Zealand continues to grapple with an underinsurance challenge. Despite this low uptake, over 90% of those that have life and health insurance believe their policies offer good value for money,” Hope said.
The FSC report identifies cost as the dominant reason New Zealanders do not hold cover. Of those who had never taken out insurance, 74% cited expense as the reason. Critically, 64% said they would consider taking out a policy if they had more money – a finding that maps directly onto the financial pressure the Deloitte survey documents.
The knowledge gap compounds the affordability barrier, and it falls hardest on younger cohorts. The FSC report found that Gen Z respondents were approximately three times less likely than Baby Boomers and Pre-Boomers to know about the limitations of insurance. Just over two-thirds of under-30s reported confidence in choosing an insurance policy, compared with higher rates across older age groups. Notably, 39% of respondents overall did not know that the Accident Compensation Corporation (ACC) does not cover loss of income from illness, conditions related to ageing, or emotional issues – a gap that is wider among younger generations.
That knowledge deficit matters commercially. The FSC report found that 25% of those who had never held insurance said they would consider taking out a policy if their health started declining – yet just 3% of that group knew they might not be able to obtain cover once a health issue existed. The implication is that a portion of the uninsured market believes it can defer the decision until it becomes necessary, when in practice the window may already be closed.
The connection between housing and insurance demand is direct. Term life insurance accounts for 27.8% of total life insurance gross written premiums in New Zealand and is commonly used to cover mortgages and personal loans. When homeownership is deferred, so is the trigger for much of that cover.
The Deloitte survey found 72% of New Zealand Gen Zs and 69% of millennials said housing affordability or availability affects their career decisions and where they can work. Stats NZ’s Housing in Aotearoa New Zealand: 2025 report provides the structural context: since 2018, individual homeownership rates have decreased for all age groups except those under 25 and those aged 75 and older. Average annual housing costs for a New Zealand household increased 31% in the June 2024 year compared with the June 2020 year, while average disposable income increased only 24% over the same period.
Cost of living ranked as the top concern for New Zealand’s younger generations in the Deloitte survey – cited by 56% of Gen Zs, compared with 38% of their global peers. The FSC’s report found the same force driving policy cancellations: across life, trauma, income protection, and health insurance, cost of living was the leading reason respondents had cancelled cover, cited by between 39% and 55% of former policyholders depending on product type.
While homeownership barriers constrain life and mortgage protection lines, the financial stress data points to a segment where latent demand is present. Forty-one percent of New Zealand Gen Zs and 34% of millennials in the Deloitte survey said they feel stressed all or most of the time, with longer-term financial security and day-to-day finances ranking as primary sources of anxiety.
That profile – employed, financially anxious, income-dependent – maps onto income protection and trauma cover. The FSC report found that 4 in 5 New Zealanders have not insured their income against sickness or disability, and that half of all respondents were not financially prepared for the loss of income by the main income earner.
The employer channel offers a viable distribution pathway. The FSC report found that close to 90% of respondents said they would want or possibly want life and health insurance provided by their employer – a figure that builds directly on the link between affordability and uptake. The Deloitte survey reinforces the retention logic: 67% of Gen Zs and 70% of millennials in New Zealand said they have colleagues they consider personal friends, and those with workplace friendships were more likely to plan to stay with their employer for more than five years.
Deloitte New Zealand partner Lauren Foster said the findings reflect how younger New Zealanders are recalibrating their relationship with financial decisions. “They’re making deliberate choices about how they build their careers, where they work, and when they take major life steps. Financial pressure, housing affordability, and wellbeing are all influencing how these generations define success,” Foster said.
For insurers, the data points to a product design and distribution challenge rather than a demand problem. The FSC’s own research confirms the appetite is present – younger generations who hold cover rate it positively – but affordability, knowledge gaps, and deferred life milestones are combining to keep uptake low precisely when the window for cover is widest.
The Deloitte survey drew on responses from 22,595 Gen Z and millennial respondents across 44 countries, including 501 in New Zealand. Fieldwork was conducted between Nov. 24, 2025, and Jan. 15, 2026.
