The global insurance market’s prolonged soft cycle is now shaping the insurance landscape in New Zealand, with local brokers and underwriters adapting rapidly to a new normal of falling premiums and heightened competition. For Kiwi insurance professionals, these conditions present both a strategic challenge and a window of opportunity to deliver greater value to clients – if they can navigate the shifting dynamics with agility and insight.
Globally, insurance markets have been on a downward trajectory for several quarters, and New Zealand is no exception. The current soft market is underpinned by a confluence of factors: abundant reinsurance capacity, a relatively benign period for natural catastrophe (nat cat) losses in key regions, and a competitive influx of capital seeking returns in insurance lines. As a result, rates are falling across core segments such as commercial property, general liability, and professional indemnity .
For New Zealand brokers, this means the power dynamic has shifted. With surplus capacity and underwriters eager to deploy it, brokers are aggressively remarketing client accounts to secure not just better terms, but also broader coverage. “There are definitely lots of opportunities because there are tons of remarkets happening at the moment,” said Kelsey Craver (pictured left), regional development underwriter on South Island at Market Lane Insurance Group New Zealand.
Cliff Scott (pictured right), head of construction for Mecon New Zealand, echoed this sentiment, noting the uptick in activity: “We're seeing opportunities in that brokers are now remarketing a lot of accounts that perhaps haven't been remarketed in a few years,” said Scott.
The soft market is not just about lower premiums – it’s also about value creation. Brokers are leveraging more affordable pricing to enhance risk management outcomes for clients. Extensions to existing coverage, once considered a luxury, are now within reach for many businesses. “This might include increased extensions for, say, machinery breakdown,” Craver added.
Business interruption (BI) policies, in particular, are being enhanced with additional extensions, giving clients a more robust safety net. This is a significant development for New Zealand businesses, many of whom have become acutely aware of the importance of comprehensive BI cover following recent events such as the COVID-19 pandemic and severe weather incidents.
However, the soft market is not without its challenges. As brokers compete fiercely for business, client retention is becoming more difficult. “A lot of New Zealanders are obviously feeling it at the moment, so price is a key driver for a lot of people,” Craver said. The risk for brokers is that, in the race to offer the lowest premiums, they may erode margins or overlook the nuances of coverage quality.
Christchurch-based Craver acknowledged the competitive pressure: increasing competition from other brokers is making it harder to retain accounts, even as new business opportunities proliferate.
The million-dollar question for New Zealand insurance professionals is: how long will these conditions persist? Industry reports suggest that the soft phase will continue in the near term, barring a major market shock. Ample reinsurance capacity and a lack of significant nat cat events are keeping rates suppressed. However, there are warning signs on the horizon. Specialty and high-risk lines – such as marine in conflict zones, cyber, and catastrophe-exposed property – could see localised hardening if loss trends change or capital retreats .
Both Craver and Scott shared their insights at the recent New Zealand Underwriting Agencies Council’s (NZUAC) Auckland Expo, where local delegates discussed the outlook for the market. During the keynote speech by Tim Grafton, former CEO of the Insurance Council of New Zealand (ICNZ), there was cautious optimism that the soft market could persist for some time, but with the caveat that global volatility and climate risk could quickly change the equation.
For New Zealand insurance professionals now is the time to capitalise on the soft market, but not at the expense of long-term client relationships or risk management standards. The most successful brokers will be those who use this period to deepen client engagement, broaden coverage, and prepare for the eventual turn in the cycle.
As the market evolves, staying informed and agile will be key. The current environment offers a rare chance to deliver tangible value to clients – if brokers are willing to look beyond price and focus on holistic risk solutions.
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