New Zealand’s travel insurance market is dealing with a claims environment shaped by a pattern its policy frameworks were not built to handle: government travel advisories shifting between risk levels within weeks, leaving a growing number of policyholders exposed to conflict-related exclusions they may not have anticipated at the time they arranged cover.
The Ministry of Foreign Affairs and Trade (MFAT) raised its travel advisory for the United Arab Emirates, Qatar, Bahrain, Kuwait, and Oman to Level 3 on July 20, 2026, urging New Zealanders to avoid non-essential travel to those countries. The move reversed a downgrade that had taken place less than a month earlier. RNZ reported that following a US-Iran memorandum of understanding in June, a MFAT spokesperson said: “Our advice level for the majority of Gulf states has returned to pre-conflict levels,” with the UAE, Qatar, Bahrain, Kuwait, and Oman all returned to Level 2. That position no longer holds.
The advisory reversal has direct commercial weight given the volume of New Zealand outbound travel routed through Gulf transit hubs. New Zealand-resident traveller arrivals – which include Kiwis returning from abroad – reached 3.51 million in the year to December 2025, according to Statistics New Zealand. Many New Zealand travellers to Europe also transit through major Gulf aviation hubs such as Dubai, Doha, and Abu Dhabi, meaning disruption in the region can affect journeys well beyond the Middle East itself.
Southern Cross Travel Insurance’s (SCTI) Future of Travel 2026 report, drawn from a survey of 1,072 New Zealanders conducted in late 2025, found that 88% of respondents now regard travel insurance as a priority for international trips, up from 79% in November 2024. Yet independent research commissioned by SCTI found that around 19% of New Zealanders still travelled overseas without any cover in 2025, compared with 15% in 2024, with the uninsured rate among 18- to 29-year-olds reaching around 26%. That gap means a material proportion of those affected by the current advisory changes have no policy recourse at all.
SCTI received 51 claims from New Zealanders relating to Middle East travel between February 28 and June 28, 2026, with its war and violence exclusion applied to all or part of each, according to Stuff. SCTI’s website continues to carry an active travel alert on the airspace disruption, confirming the exclusion remains in force. No total Middle East claims volume for that period has been publicly disclosed, so the 51 figure cannot be expressed as a proportion of SCTI’s broader book for the region – a gap that requires direct disclosure from SCTI to resolve.
The exclusion position is uniform across the New Zealand market. All four underwriters that back virtually every travel insurance brand sold in New Zealand exclude war-related claims, with policy wording that is consistent across providers, according to MoneyHub’s March 2026 analysis of policy documents. The Insurance Council of Australia (ICA) has described war and conflict exclusions as standard practice worldwide, noting that “the scale and unpredictability of armed conflict create risks that are difficult for insurers to price.”
SCTI noted it can still support travellers through disruptions for losses unrelated to an excluded event, such as an injury or theft occurring independently of conflict activity, per the Stuff report. The Insurance Council of New Zealand (ICNZ) has further noted that exclusions may apply when fuel supply constraints or cost pressures linked to overseas conflict lead airlines to cancel or alter services, even where travellers are not visiting the conflict zone.
The pace of the reversal creates a risk that sits upstream of any individual claim. When MFAT brought Gulf states to Level 2 in June, New Zealanders who had deferred travel began rebooking – some purchasing or reinstating policies during that lower-advisory window. Those policies now operate under conflict exclusion conditions again. ICNZ guidance states that before travelling, policyholders must tell their insurer if they intend to travel to any country with a “do not travel” advisory status, as it may not be possible to obtain cover for those destinations.
A market in which Gulf hub advisory levels cycle rapidly across multiple tiers within months creates pressure on point-of-sale disclosure processes and on claims-stage causation assessments. No current on-record ICNZ statement addressing the July 2026 re-escalation and its specific implications for exclusion application was publicly available at the time of publication – a gap that warrants direct engagement with the council.
These claims decisions are being made within an expanding disputes and conduct framework. The Insurance & Financial Services Ombudsman Scheme (IFSO Scheme) accepted 600 disputes in the year to June 30, 2025, a 25% increase on the prior year and more than double its 2022 total of 285, with travel policies accounting for 18% of investigated cases. The Conduct of Financial Institutions (CoFI) regime came into full effect on March 31, 2025, requiring licensed insurers to uphold the fair conduct principle across all customer interactions. The Financial Markets Authority’s (FMA) regulatory priorities for insurers include proactive product and service reviews, and engagement on the implementation of the Contracts of Insurance Act 2024, due to come into full force in November 2027. War and violence exclusion decisions – including how they are communicated at point of sale and applied at the claims stage – sit directly within that mandate.
Emirates launched what it describes as the world’s first Comprehensive Travel Cover product on June 17, 2026, available to New Zealand customers. The product, backed by Travel Guard, includes conflict-related medical expense reimbursement of up to US$25,000, a free 30-day trip extension, airline-managed hotel accommodation during disruptions including airspace closures, and complimentary rebooking onto other airlines where Emirates services are cancelled due to conflict – with coverage applying regardless of government travel advice. Emirates president Sir Tim Clark stated: “Listening to customer feedback, we realised that travel demand remains strong but there was a gap in the market with regards to travel insurance cover.”
The product’s structure carries a specific implication for the New Zealand market beyond its consumer appeal. Emirates delivers hotel accommodation as an airline service rather than an insurance benefit – a distinction that affects how coordination-of-benefits questions would be assessed in any dispute involving a policyholder also holding a standalone New Zealand travel policy. The broader question for underwriters is whether conflict-adjacent coverage will increasingly be embedded at the carrier level, with downstream implications for how war exclusions in standalone policies are disclosed and defended under CoFI’s fair conduct requirements.
