For insurance professionals in New Zealand, the year so far is marked by relentless regulatory overhaul, surging technology adoption and mounting pressure to deliver customer value amid economic uncertainty. At the Resonate ’25 Insurance Innovation Summit in Auckland, Kris Faafoi, CEO of the Insurance Council of New Zealand (ICNZ) and Kirk Hope, CEO of the Financial Services Council (FSC), shared their perspectives on the sector’s most urgent challenges and opportunities.
Faafoi said one government focus - with the ICNZ’s help - has been moving ahead with resilience initiatives. He referred to Minister Simon Watts announcement earlier this month of a National Adaptation Framework. The Framework aims to address the growing risks posed by climate change including floods, storms and other natural hazards. Apart from resilience, the initiative aims to support economic growth and keep societal costs as low as possible as climate impacts intensify.
Insurance affordability remains a persistent challenge for the industry, especially in the small domestic market, said Hope. He said the industry is still grappling with this issue.
“It's been boiling for a long period of time, the affordability challenge for a lot of people,” said the CEO. “What that means is how do we get more insurance products to people at a lower price?”
One answer, both CEOs argued, could be through technology like artificial intelligence (AI). The technology is emerging as a powerful tool to help address cost pressures and customer needs.
“From a business sense I think there's a really good uptake of technology,” said Faafoi.
He said the use of AI in the claims process is making insurance businesses faster and more efficient.
“But it also allows you to make better use of your human resource and focus on those customers that need more attention,” said the ICNZ leader.
Hope said the promise of AI goes beyond efficiency and, more and more, will involve an approach to product design called micro-personalisation. This involves designing and offering policies that are hyper-targeted to an individual’s lifestyle, behaviours, or even moment-to-moment activities. For example, pay-as-you-drive car insurance.
The FSC CEO said this tech could be used to explain insurance contracts to people in ways they are more likely to understand, which he suggested, would help insurers better comply with regulations.
Faafoi said collaboration between industry and government is now critical, especially as data rights and privacy become central to the sector’s future.
“If you look at the consumer data rights challenges that we've got and the legislation that's passed, obviously industry and government have to work closely together,” he said. “I think everyone's watching those first two cabs off the rank.”
The sector’s ability to thrive could heavily depend on how well it can align innovation with regulation. Hope said limited resources could make these efforts challenging.
“My plea there is particularly for regulators to be very collaborative and I know the FMA has got its sandbox but the challenge, I think, is limited resources and the important thing is that this is going to be a relatively resource intensive process,” he said.
He said if industry and government can figure out this resources challenge, it should help insure that New Zealand can keep up with the curve, perhaps even ahead of it, and position the country as a technology leader.
