New Zealand Life Insurance Market Projections for 2025
New Zealand’s life insurance market is expected to grow significantly in 2025, reaching $3.8 billion in gross written premiums, according to a report by GlobalData. This represents an 8.2% year-on-year growth from 2024.
Key Drivers of Growth
The growth is primarily driven by several factors:
- An ageing population
- Heightened health awareness
- Rising cost of living
GlobalData forecasts that the market will continue to grow at a compound annual growth rate (CAGR) of 7.0% from 2024 to 2029, reaching $4.8 billion by 2029. The expected economic recovery in 2025, with a real GDP growth of 2%, is also anticipated to support household consumption and drive demand for life insurance products.
Segment Performance
- Personal Accident and Health (PA&H) Insurance: This segment dominates the market, accounting for 65.3% of the life insurance market in 2024. It is expected to grow at a CAGR of 6.9% from 2025 to 2029, driven by rising healthcare costs and a 10% to 15% increase in premium prices.
- Term Life Insurance: Making up 27.8% of gross written premiums in 2024, term life insurance is projected to grow at a CAGR of 6.4% between 2025 and 2029. Its popularity stems from its affordability and use in covering mortgages and personal loans.
- Whole Life Insurance: Although it accounted for only 3.8% of premiums in 2024, whole life insurance has shown significant growth with a CAGR of 19.2% from 2020 to 2024. It is forecast to grow at a CAGR of 8.0% through 2029, driven by the increasing number of people over 65 in New Zealand.
Challenges and Opportunities
Despite the positive outlook, challenges such as high unemployment and inflation could pose risks to this growth. Additionally, the rising cost of living may lead to underinsurance, potentially hindering market growth. To address these issues, insurers are advised to introduce innovative products and leverage digital technologies to make insurance more affordable and accessible.
New Zealand’s life insurance penetration rate was 1.3% in 2023, significantly lower than other Asian markets. The industry is expected to navigate these challenges while capitalizing on growth opportunities driven by demographic changes and economic recovery.
