New Zealand’s life insurance market is expected to grow from $3.5 billion in 2024 to $4.8 billion by 2029, according to research from GlobalData. This marks a 7.0% compound annual growth rate (CAGR) in gross written premiums over the forecast period.
The rise is largely due to growing demand for whole life and personal accident and health (PA&H) insurance. Increased awareness of the need for protection products is also playing a key role.
GlobalData forecasts that the market will grow 8.2% year-on-year in 2025, reaching $3.8 billion in gross written premiums. This growth will be supported by an ageing population, higher health awareness, and the rising cost of living.
New Zealand’s economy, which relies heavily on agriculture and services, is expected to recover in 2025. The real GDP is projected to rise by 2%, compared to just 0.24% in 2024 and 0.73% in 2023.
“Economic recovery, easing inflation, and increased private investment will boost household consumption and drive demand for life insurance,” said Swarup Kumar Sahoo, senior insurance analyst at GlobalData. However, he warned that high unemployment and inflation could still pose risks to the industry’s growth.
The PA&H insurance segment is the largest in the market, making up 65.3% of total gross written premiums in 2024. It is expected to grow at a 6.9% CAGR from 2025 to 2029. This growth is driven by rising healthcare costs and a 10% to 15% hike in premium prices this year. The Financial Services Council reported that the number of New Zealanders with health insurance increased from 32% in 2022 to 37% in 2023.
Term life insurance, which represents 27.8% of the 2024 market, is expected to grow at a 6.4% CAGR through 2029. Its affordability and popularity for covering mortgages and personal loans make it a key product for many policyholders.
Whole life insurance, though a smaller portion of the market at 3.8% in 2024, posted a 19.2% CAGR from 2020 to 2024. It is forecast to grow at a solid 8.0% CAGR through 2029, fueled by demand from an ageing population. By 2040, New Zealand is projected to have 1.3 million people aged over 65. The life expectancy at birth has also risen from 81.6 years in 2015 to 82.9 years in 2024.
Other life insurance products made up 3.1% of the market in 2024.
Despite the market’s growth, New Zealand’s life insurance penetration rate was just 1.3% in 2023. This is much lower than countries like Hong Kong (15.9%), Singapore (7.5%), South Korea (7.4%), and Japan (6.3%).
“The rising cost of living may lead to underinsurance and slow market growth,” Sahoo added. “To overcome this, insurers need to offer innovative, affordable products and use digital technology to reach more people.”
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