New Zealand’s commercial insurance market stands out for the dominance of two big insurance firms and also the difficulty new entrants can have establishing a foothold.
However, in recent years, the number of niche underwriters has slowly grown and strong relationships with brokers, they say, are key. “New entrants face high financial liquidity requirements, strict regulatory compliance, substantial startup costs, along with elevated reinsurance costs,” said Liz Geden (pictured), country head of New Zealand for Agile Insurance Group. “All of these factors make it difficult for new players to gain a foothold, which has kept the market tightly held.”
The country’s economy is also small, with just over five million people, and most businesses are SMEs rather than large corporates. This also affects premium expectations and underwriting strategy, say some underwriters and brokers.
“Many rely on import/export, which adds complexity,” said Geden. “The regulatory environment is also unique, especially around Worksafe investigations.”
However, arguably the biggest quirk is the Accident Compensation Corporation (ACC) which provides no-fault injury cover to all residents and visitors, which significantly alters liability exposures.
“International insurers often miss this nuance, and it can lead to misaligned products,” said Geden. “Understanding these local dynamics is essential to underwriting success here.”
Some of these issues were likely behind NTI withdrawing from the market in 2012 after entering around 2010. After that, Global Transport and Automotive (GT Insurance), a firm underwritten by Allianz and another big player in the heavy truck and transport space in Australia, also made efforts across the Tasman. According to the Allianz website, GT Insurance ceased operating in New Zealand as an underwriting agency in 2017.
As if that wasn’t enough, QBE exited personal lines, and Allianz withdrew completely. But there’s been notable success among underwriting agencies, which have grown by offering niche, flexible solutions.
IB asked Geden about the recent failure of big insurers to get local traction and what she sees as the secret to local insurance business success?
“It’s true,” she said. “QBE exited personal lines and Allianz withdrew completely but there’s been notable success among underwriting agencies which have grown by offering niche, flexible solutions.”
The slowly growing importance of niche insurers is evidenced by the launch of the New Zealand Underwriting Agencies Council (NZUAC) in 2020. The group held its first broker expo in 2023 and now boasts more than 40 member agencies.
One of its newer members – and further evidence of a strengthening agency presence – is Geden’s firm: Agile Insurance Group. This Australia-headquartered agency launched locally in 2024 and Geden was hired in May this year.
Also in 2024, another Australia-based agency opened for business in New Zealand: Market Lane Insurance Group now has an on the ground presence with offices in Auckland and Christchurch.
Geden pointed to the “dual control” Agile and some other agencies have through their relationship with Lloyd’s of London.
“We leverage our Lloyd’s Syndicate and manage both distribution and underwriting outcomes,” said Geden. “That dual control allows us to be more agile and responsive to broker and client needs and in a market like New Zealand, that’s a major advantage.”
She said NZ is a market where it is particularly important to offer brokers tailored solutions and offer them partnerships rather than just a product. “Our brokers understand our products and how they fit client needs, which is something many previous entrants didn’t invest in,” said Geden.
To ensure a client’s insurability and that they get the right coverage, the risk management element of a broker’s job in New Zealand, she suggested, can also be more demanding than in some other markets. “Risk management is key,” she said.
For example, she said brokers working with tech firms need to focus on data protection, incident response plans and clear contractual terms.
With import/export businesses, said Geden, brokers need to ensure their customers have strong documentation, product liability protocols and comply with international standards.
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