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AM Best stated that despite economic challenges, New Zealand’s non – life insurance sector benefits from solid premium growth driven by rate adjustments in property, motor, and commercial insurance lines. The “Market Segment Outlook: New Zealand Non – Life Insurance” report pointed out strong capital buffers and high domestic investment yields as factors contributing to the sector’s resilience in the face of volatile claims and market conditions.
The report also identified the increasingly volatile weather in New Zealand as a challenge for insurers, resulting in tighter underwriting and greater reliance on reinsurance. Although the reinsurance sector shows signs of stabilisation, capacity constraints and rising costs are set to continue affecting primary insurers’ earnings. AM Best expects steady non – life premium growth in the near future, in line with the mid – to high single – digit increases in gross written premiums seen in recent years. In 2023, significant rate adjustments followed major weather disasters, driving premium growth above general inflation levels, which have since declined.
New Zealand’s non – life insurers have strong capital adequacy, having withstood 2023’s major weather events due to solid reinsurance arrangements. As noted by Yi Ding of AM Best, 2024 has seen fewer significant weather – related events, reducing claims expenses and enabling insurers to enhance their capital buffers.
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