Insurance Market Update | July 2020

The New Zealand insurance market continued to firm during 2019 and into early 2020, with premium increases common across most classes. In the case of property, increases were accompanied by restrictions in capacity for locations in higher risk earthquake zones, with Wellington most severely impacted.  As we approach the end of the second quarter 2020, premium increases are slowing, and in particular ND rates. The liability market has also experienced challenging times with directors and officers insurance particularly affected by rising costs associated with a more litigious class action environment.

The COVID-19 pandemic is presenting significant challenges for the economy and while insurance policies generally contain infectious disease or pandemic exclusions, there are some types of policies that provide coverage.  Globally indications of losses from COVID-19 are in excess of US$101billion. In New Zealand insurers largely excluded cover for infectious diseases so impact locally is forecast to be relatively minor.

There is also an expectation that many businesses may look to reduce their insurance spend as part of their overall expenditure reduction efforts in coming months. This could place pressure on insurers results. We will be monitoring this situation closely and will update our market forecasts as required.

Read the full insurance market update here.

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