Insurance costs have become a significant financial burden for New Zealanders, rising to become their fourth-largest financial concern, according to recent data from Consumer NZ. The latest national survey of over 1,000 respondents revealed that increasing premiums for house, contents, vehicle, and health insurance are major contributors to household financial stress. This represents a notable shift from October 2024, when insurance ranked sixth among financial concerns.
The survey also found a decline in confidence in the insurance sector, with more participants reporting distrust than trust in insurance providers. Rebecca Styles, investigations lead at Consumer NZ, noted that affordability is becoming a significant barrier. “Insurance is meant to provide a safety net, but for many people, it’s becoming increasingly difficult to access. When you add the complexity of policies and the lack of transparency, it’s easy to understand why trust in the industry is falling,” she said.
Affordability Gap Widens Amid Environmental Risks
Consumer NZ’s forthcoming report on house and contents insurance is expected to address the growing affordability challenge in the context of increasing climate-related risks. More severe and frequent weather events have led to higher risk-based pricing, leaving some policyholders in high-risk areas facing higher premiums or struggling to secure coverage. “We’re hearing more and more from consumers who feel they’re being priced out of essential cover,” Styles said.
While environmental risk remains a factor in premium calculations, public concern about climate change has lessened. The proportion of respondents naming climate change as a top concern dropped to 12%, compared with 15% in January and 17% the previous year. In contrast, cost-of-living concerns continue to dominate public discourse, with 65% identifying it as their main worry – an increase that reflects growing stress on household budgets.
Changing Consumer Behavior
Parallel findings from the Insurance Council of New Zealand (ICNZ) highlighted a shift in consumer behavior as policyholders re-evaluate their insurance relationships. A recent ICNZ-commissioned study revealed that 20% of respondents had changed insurers within the past two years, while 34% had done so within five years. At renewal, 21% routinely compare offerings, although a quarter said they do not consider alternatives. “The survey shows that a relatively low number of New Zealanders consider switching their insurance provider,” said ICNZ chief executive Kris Faafoi.
Financial pressure remains acute, particularly among lower-income households, with nearly half of respondents expressing concern over job stability. Research from Ipsos showed that one in four households reported struggling to meet everyday costs, a figure that has held steady since 2023.
