New figures from the Financial Services Council (FSC) show New Zealanders hold 4.13 million life insurance policies and 1.35 million health insurance policies, with insurers paying $1.368 billion in life claims and $2.545 billion in health claims in the year to September 2025. According to the FSC’s State of the Sector Report, released in February 2026, life and health insurance account for a major share of the country’s personal risk protection, measured by both policies in force and claims paid.
The report collates industry, regulatory, and consumer data to outline where cover is concentrated and where gaps remain. While the volume of claims points to extensive benefit payments, the FSC says New Zealand still ranks among the more underinsured OECD markets for life and health risks. The council describes this as limited financial buffers for many households if they experience death, serious illness or income disruption.
FSC chief executive Kirk Hope said the report is intended to give policymakers and industry a more detailed view of coverage levels and unmet needs. “The data gives us a clear evidence base for identifying where the opportunities lie – whether that’s growing KiwiSaver participation, deepening capital markets, or improving insurance coverage. Working constructively with government, there is a significant opportunity to build a stronger, more resilient financial system that supports New Zealand’s long-term prosperity,” Hope said.
The FSC’s earlier study, Money & You: Valuing Belongings Over Ourselves, examines how households prioritise insurance types. It finds New Zealanders are about twice as likely to have car insurance as life or health insurance, indicating that physical assets are more commonly insured than personal risks. “The research shows New Zealanders instinctively protect their homes, cars, and possessions, but when it comes to insuring their most valuable asset, themselves, there’s a striking disconnect,” Hope said.
The report notes that those who do hold life and health policies tend to see them as a way to manage medical costs and access to care, with respondents linking health insurance to faster treatment, lower direct expenses, and a quicker return to work and daily activities. Rising living costs are identified as the main reason for cancelling or avoiding cover, although life and health policies are reported to be more likely to be retained than some other lines.
The survey also reports that 85% of respondents believe they have a moderate to very good understanding of life insurance products. Around 72% say they have made at least one insurance claim, most often in relation to car, health/medical, or contents insurance. When seeking professional guidance, more respondents report using advisers for mortgages and KiwiSaver than for insurance, indicating that advice channels for personal risk products are comparatively less used.
The FSC’s policy work focuses in part on how tax rules affect employer‑sponsored life and health insurance. The Money & You findings show that 78% of people with life insurance and 56% with health insurance pay premiums themselves rather than receiving cover through their employer. “For those that do have life and health insurance, most Kiwis are paying for it out of their own pockets rather than receiving it through an employer remuneration package. With cost being a barrier, expanding access to insurance through workplace schemes would boost uptake and improve coverage across the population. The FSC has identified a required policy shift: exempting employer contributions to life and health insurance from Fringe Benefit Tax (FBT) would remove a key barrier, enabling more New Zealanders to access essential cover through their workplaces,” Hope said.
Hope said the current FBT settings can influence whether employers, particularly small and medium‑sized businesses, include group insurance in their benefit structures. “FBT on employer provided group insurance schemes discourages businesses, particularly small and medium-sized enterprises, from including insurance as an employee benefit. There are important policy implications here. Improving access to life and health insurance can enhance workforce resilience, reduce pressure on the public health system, and provide critical financial buffers for families and individuals in times of crisis. This tax effectively penalises employers for supporting the wellbeing of their staff,” Hope said. The FSC says it intends to keep working with ministers and officials on the changes it advocates, which it characterises as evidence‑based measures to widen access to protection, support labour market participation, and reinforce financial wellbeing through higher levels of life and health cover.
The State of the Sector Report also situates insurance within New Zealand’s broader financial system, which includes banks, investment managers, superannuation providers, and intermediaries. Alongside the insurance data, the report sets out indicators such as GDP contribution and funds under management, and discusses how these relate to household risk and longer‑term financial outcomes. Hope said the report’s depth is intended to inform both regulatory and commercial decision‑making. “This is the first time the Financial Services Council has compiled a sector status report to this depth, which draws on a range of credible data sources to quantify the impact of the sector against societal and economic factors,” Hope said.
KPMG New Zealand consulting partner Cath Robertson-Hodder said the consolidation of data provides a reference point for industry and government. “Financial services is not simply a support industry – it’s a major driver of New Zealand’s economy. This report helps put clear, comparable data around that contribution,” Robertson-Hodder said. Released alongside the FSC Outlook 2026 annual breakfast, where Prime Minister Christopher Luxon was scheduled to comment on the findings, the report’s insurance data offers life, health, and general insurers, reinsurers, and intermediaries a current view of coverage levels, claims experience, and consumer behaviour. The material points to both the extent of existing protection and the remaining scope to develop life and health solutions, particularly through workplace‑based arrangements and any future changes to tax and policy settings.
