Risk-based pricing is moving into New Zealand’s mainstream consumer channels. From July 1, homebuyers seeking a Westpac NZ insurance quote can view a property’s modelled natural hazard exposure inside their banking app before they buy – putting address-level risk in front of consumers at the point of sale, at the same time the residential market contends with rising premiums, localised availability constraints, and a government review of affordability. The feature lets Westpac One customers access Tower Insurance’s property-level flood, earthquake, sea surge, and landslide assessments while requesting a quote. It accompanied Tower’s replacement of IAG as Westpac’s general insurance underwriter.
What is new is less the data than where it sits. Among the main retail banks, general insurance is underwritten by IAG at ASB and BNZ, by Vero at ANZ, and now by Tower at Westpac, with Kiwibank distributing Tower cover on a referral basis. Kiwibank’s Tower referral already points to Tower’s risk-rating tool, which assesses earthquake, flood, sea surge, and landslide risk at a given address. The IAG- and Vero-based bank offerings do not surface comparable address-level hazard data at the point of quote. Westpac’s step is to embed that assessment directly within its own digital banking at the quote stage, rather than referring customers to the insurer’s website. The commercial implication is a distribution advantage. Surfacing hazard pricing before purchase gives Tower a channel through a major bank that its bancassurance rivals do not yet match, and it puts risk signals in front of buyers at the moment they are weighing a property – with the potential, over time, to shape which homes they pursue and how they price offers.
Public appetite for the data is documented. The Natural Hazards Commission Toka Tū Ake (NHC) reported close to 85,000 visits to its Natural Hazards Portal over the prior year, with 16% of visitors downloading hazard information and more than half taking resilience steps; citing NielsenIQ research, it said 91% of homebuyers now weigh natural hazard risk when purchasing. Westpac’s own survey found 90% of respondents rated access to such information as extremely or very important, though only 63% of homeowners sought it before their current purchase – 91% among buyers from the past two years, against 35% of those who bought more than a decade ago.
The context is a market growing more expensive. Treasury found residential premiums have grown at three times the rate of general CPI since 2011, with a 40% rise in the past two years, and larger increases for some households in high-risk areas. The Reserve Bank of New Zealand (RBNZ), in its May 2026 Financial Stability Report, estimated the total sum insured of residential dwellings in 2024/25 at around $1.5 trillion and put the national average annual premium for domestic buildings cover at approximately $2,900, and it identified affordability, underinsurance, and insurer retreat from flood-exposed areas as pressures that could increase financial stability risks.
Treasury described the residential market as highly concentrated, and more so since the Canterbury earthquakes, and noted some evidence of higher insurer profit margins in New Zealand than in Australia, though it said the causes are unclear. Consumer NZ, drawing on Stats NZ data, reported house insurance premiums have risen 916% since 2000, and that the share of surveyed households dropping cover on cost grounds rose from 7% in 2022 to 17% in 2025.
Treasury has tied the industry’s move toward greater risk-based pricing for hazards such as flooding to higher premiums for affected properties, and warned that cover may become unavailable for some properties at any price as hazard models are updated. Tower has framed its model in those terms: “Premiums are calculated based on the flood, earthquake, sea surge, and landslide risk Tower sees at that particular property, not someone else’s,” chief executive Paul Johnston said. In January 2026, Cabinet directed the Council of Financial Regulators (CoFR) – the RBNZ, the Financial Markets Authority (FMA), the Commerce Commission, the Ministry of Business, Innovation and Employment (MBIE), and Treasury – to run a six-month review of pricing and affordability, reporting mid-2026, and paused a proposed increase in the natural hazards levy while it does so.
The pricing debate sits alongside unresolved adaptation policy. The Ministry for the Environment’s National Adaptation Framework, released in October 2025, commits to a publicly available National Flood Map and leans toward market signals guiding adaptation, but does not settle who pays to move households out of harm’s way. The funding question remains contested: at the Insurance Council of New Zealand’s (ICNZ) annual conference in Auckland on June 4, Finance Minister Nicola Willis questioned an industry proposal for a dedicated natural hazard resilience levy, arguing resilience should come from prudent government infrastructure investment rather than a separate charge.
The public scheme itself is stretched: Treasury has advised the natural hazards fund held $622.6 million as at Sept. 30, 2025, and that its levy sits below the level needed to meet expected long-run costs. The 2023 Auckland Anniversary floods and Cyclone Gabrielle remain the two largest weather events in the country’s insured history, generating more than 118,000 claims and about $3.8 billion in insured losses. Consumer advocates have flagged the link between insurance availability and mortgage lending, given that home loans typically require insured collateral.
For underwriters, brokers, and lenders, the direction of travel is clear: hazard exposure and risk-based pricing are moving into the consumer’s line of sight before purchase, at the same time regulators scrutinise how those prices are set. The question to watch is how the CoFR review treats that transparency – as part of the affordability fix, by helping buyers avoid or mitigate risk before they commit, or as a driver of the retreat from high-hazard areas the RBNZ has flagged. The answer will shape how far banks and insurers push risk data into the point of sale, and how advisers field the questions it prompts.
