Inflation data from Statistics New Zealand indicate that home, car and contents insurance premiums have been soaring in the country.
The figures for insurance premiums from Stats NZ’s Consumer Price Index (CPI) “basket of goods” show that home insurance premiums increased by 17.9% in the year to June. Meanwhile car insurance premiums increased by 5.7% and contents insurance premiums by 5.9%. These hikes were substantially greater than inflation, which stood at 1.5%, according to a report in interest.co.nz.
New Zealand’s three largest general insurers -- IAG, Vero and Tower -- have been flagging premium increases for some time.
Their claims costs have been surging, as they dealt with an uptick in storm damage, higher labour costs and more costly building materials and car parts.
Industry figures collated by the Insurance Council of New Zealand show, for instance, that in the year to September 2017, insurers paid NZ$59.68 ($40.77) in claims related to domestic buildings and contents for every $100 they received in premiums. This loss ratio was slightly higher than in previous years, when insurers paid around NZ$55 in claims.