Boston, MA -- (SBWIRE) -- 06/11/2014 -- BMI View: The latest results from the leading New Zealand insurance companies (in relation to H213 and 2013) confirm our view that the prospects for both major segments are fairly uninspiring. In the life segment, the leaders' businesses have performed well by many metrics: however, the actual and pot ential growth appears to relate mainly to KiwiSaver and other wealth management products, which do not include an insurance component. The non-life segment has coped well in the aftermath of the Chr istchurch/ Canterbury earthquakes of 2011. Higher costs and reinsurance rates have, by and large, been passed onto customers. However, many of the non-life companies recognise that further price increases may not be accepted by the customers. This is at a time that competitive pressures are picking up in various commercial lines.

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By most metrics, the insurance sector in New Zealand remains underdeveloped in early 2014. This is partly because of the socialisation of risk through the Earthquake Commission (EQC) and the Accident Compensation Corporation (ACC), in the non-life (property and casualty) and life segments respectively. The EQC demonstrated its effectiveness in the wake of the main Christchurch earthquake of February 22, 2011. The Accident Compensation Corporation has been actively introducing reforms and changes to resolve its long-term funding issues.

However, there are other challenges. These include a fairly sluggish economy, a general absence of consumer confidence and the maturity of many of the main non-life lines. Non-life companies have been able to pass on the costs of higher reinsurance premiums to their customers. Overall, though, non-life premiums are growing at single-digit rates. There is no obvious catalyst for this to change.

In the life segment, two main trends continue to stand out. First, premium growth, as in the non-life segment, is sluggish. This may be because of the recent compression in real incomes. A more fundamental problem, which...

The New Zealand Insurance Report has been researched at source and features Business Monitor International (BMI)'s independent assessment and forecasts for the insurance sector. It examines industry developments, key growth drivers and risk management projections, including the macroeconomic situation, government policy, regulatory environment and the level of development and potential for growth, broken down by line. Leading insurers are profiled, covering premiums, products and services and competitive positioning.

BMI's New Zealand Insurance Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the New Zealand insurance industry.

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