SINGAPORE–(BUSINESS WIRE)–Nov 10, 2024–
AM Best is maintaining a stable outlook on the New Zealand non-life insurance segment, citing solid premium growth supported by rate adjustments, particularly in the property, motor and commercial segments, despite a challenging economic environment.
The Best’s Market Segment Report, “Market Segment Outlook: New Zealand Non-Life Insurance,” also notes positive factors such as good capital buffers, which support insurers’ ability to absorb some shocks from claims volatility, and robust investment yields amid high domestic interest rates, despite recent rate cuts.
Countervailing factors for this non-life segment outlook include New Zealand’s increasingly volatile weather conditions, prompting tighter underwriting and greater reliance on reinsurance. Despite signs of stabilisation in the reinsurance segment, capacity constraints and higher costs may continue to affect primary insurers’ earnings.
According to the report, AM Best expects non-life premium growth to remain robust over the near term and on par with prior years, when New Zealand’s non-life gross written premiums recorded average annual growth in the mid- to high single digits. In 2023, the industry saw significant rate adjustments following the Auckland Anniversary Weekend floods and Cyclone Gabrielle, which occurred early in the year and currently remain the catastrophes with the two largest non-earthquake losses in New Zealand’s history.
Rate adjustments were a key driver of non-life premium growth that exceeded general inflation, which has declined steadily from its peak of 7.3% in the second quarter of 2022, to 2.2% in the third quarter of 2024. “The property and motor segments recorded the largest rate adjustments, reflecting the growing exposure to natural catastrophes and rising repair costs caused by ongoing inflationary pressure and supply chain disruptions,” said Victoria Ohorodnyk, director and head of analytics for Southeast Asia, Australia and New Zealand, AM Best.
The report notes that the capital adequacy of New Zealand’s non-life market remains robust. Insurers have successfully absorbed the impact of the 2023 major weather-related events, owing to the comprehensive reinsurance coverages in place. “To date, 2024 has been a relatively benign year from a catastrophe risk perspective, with fewer significant weather-related events than in prior years, easing some of the pressure on insurers’ claims expenses and allowing them to build up their capital buffers,” said Yi Ding, associate director, AM Best.
To access the full copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=348509.
AM Best will discuss New Zealand’s insurance industry in further detail at its Insurance Market Briefing – Auckland, which will take place at 4:00 p.m. (GMT+13) on Monday, 11 November 2024, at Level 2/204 Quay Street, Auckland. For more information about the conference, please visit the event page and agenda.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visitwww.ambest.com.
Copyright © 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
View source version on businesswire.com:https://www.businesswire.com/news/home/20241110781892/en/
CONTACT: Yi Ding
Associate Director, Analytics
+65 6303 5021
[email protected]
Victoria Ohorodnyk
Director, Head of Analytics
+65 6303 5020
[email protected]
Christopher Sharkey
Associate Director, Public Relations
+1 908 882 2310
[email protected]
Cynthia Ang
Senior Industry Research Analyst
+65 6303 5026
[email protected]
KEYWORD: ASIA PACIFIC EUROPE AUSTRALIA/OCEANIA NEW ZEALAND SINGAPORE
INDUSTRY KEYWORD: FINANCE DATA ANALYTICS PROFESSIONAL SERVICES OTHER PROFESSIONAL SERVICES INSURANCE
SOURCE: AM Best
Copyright Business Wire 2024.
PUB: 11/10/2024 02:00 PM/DISC: 11/10/2024 02:02 PM
http://www.businesswire.com/news/home/20241110781892/en
