Insurance is the ultimate risk-management tool but the New Zealand market continues to feel the impacts of COVID-19 – many of which emanate from beyond our borders.
NZ-based insurers are dealing with changing conditions around reinsurance renewals, investment returns and incurred and reserve costs and that is affecting capacity in many sectors, premiums, deductibles and exclusions. To achieve the best outcome, our message to clients remains the need to regard insurance as a long-term partnership rather than a cost-driven, short-term transactional approach.
Globally, insurers are increasing focus on their own profitability – putting the onus back on organisations to deliver the best risk information and submissions. Willis Towers Watson works with its clients to present their risk to the insurance market in the best possible light, so they can be rewarded by optimal premium pricing and terms and conditions.
Our 2021 Insurance Market Update provides valuable insights across all the insurance classes we offer in New Zealand. Not surprisingly, insurers have concentrated on policy wordings and there is widespread introduction of communicable disease and cyber exclusions across the board. Capacity is of concern in some areas of Property, particularly earthquake risks and the use of polystyrene panels in construction while motor premiums continue to be driven by loss histories, although there are signs of more stable pricing ahead. General liability trends show plentiful capacity but the predicted rate increases from 2020 have been slow to flow down to the New Zealand market.
The Willis Towers Watson team prides itself on staying close to clients and market dynamics should not come as a surprise to them. Having said that, at every possible juncture, we reinforce the need for organisations to develop a long-term strategy that will help them weather not only whatever the pandemic may throw at us next, but for all economic conditions into the future.
|WTW 2021 New Zealand Insurance Market Update