Michael Brown (pictured), a former broker of 25 years, has launched Encept, a Lloyd's-approved coverholder writing New Zealand commercial property, with material damage and business interruption (BI) as its opening lines. The proposition he is taking to the market is not a cheaper number, it is a faster one.
"We've tried to build the insurer we always wanted as brokers, combining specialist underwriting expertise with smart technology to remove friction, respond faster, and spend more time on complex risks where experience and judgement really matter," Brown said.
The timing puts that claim to an immediate test, because price is already falling without anybody having to compete on service. Marsh recorded property rates across the Pacific down 14 per cent in the third quarter of 2026, after a 15 per cent fall in the second quarter. The Reserve Bank's Financial Stability Report for May 2026 attributed downward pressure on property premiums, particularly for commercial properties, to increased competition.
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That pressure is visible in the national numbers. Gross written premium (GWP) for commercial material damage and business interruption fell from $1,597,818,765 in 2024 to $1,426,858,869 in 2025, the first decline after three consecutive years of growth, according to market data published by the Insurance Council of New Zealand. Over the same year, the loss ratio for the class rose from 57.87 per cent to 63.28 per cent.
The class Encept has chosen carries a disproportionate share of the country's catastrophe losses. The South Island severe weather events of October 2025 produced $158.9 million in insured losses across 16,885 claims, of which commercial material damage accounted for $74.4 million from 4,436 claims and business interruption a further $9.3 million, according to the Insurance Council's cost of natural disasters database. Commercial material damage was the largest single component of that event, ahead of domestic claims at $60.3 million. Insurance Business has tracked the South Island's costly run of severe weather events and the way repeat storms have shifted more weather losses onto New Zealand insurers through that period.
Replacement cost is moving in the same direction. Cotality's Cordell Construction Cost Index rose 1.7 per cent in the September 2026 quarter, lifting annual growth to 4.8 per cent, as reported by RNZ. The Cordell index measures residential construction and no equivalent commercial index is published in New Zealand, so it indicates the direction of building input costs rather than measuring commercial sums insured directly.
Brown put the underwriting response in terms of what that complexity demands of the person placing the risk.
"Clients want more sophisticated advice, and we want to free brokers up to be able to do that and also have much better data to manage these risks," he said.
The sharpest point of the offer is the end of the schedule that domestic capacity handles least comfortably.
"So we are looking at most types of risk, but certainly the hard-to-place stuff is certainly always going to be a big part of what international capacity provides in New Zealand," Brown said.
That has long been the function of the coverholder model locally. Lloyd's describes its underwriters as among the largest commercial insurers and reinsurers in the country, reaching the market through a nationwide network of coverholders rather than direct placement. The New Zealand Underwriting Agencies Council represents a sector of more than 40 agencies, one that has expanded within a general insurance market long characterised as concentrated.
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Entry is the easy part of that model. Capacity that arrives during a soft market and withdraws after a bad loss year leaves the remarketing behind it and a new agency's first real test is whether it is still quoting the same risks in three years. Brown said hiring and partner selection had been built around that question.
"It's all around trying to make the right choices for longevity and build long-term partnerships," he said.
What remains untested is the part of the pitch that cannot be verified from the outside: whether the turnaround times Encept is promising survive contact with a live book and whether its appetite for difficult risk holds when rates stop falling.
